American truck makers have long enjoyed a protected status due to a stiff 25-percent tariff on foreign-built pickups, part of the so-called "chicken tax" that emerged out of a 1963 trade dispute with France and Germany. Although Toyota and Nissan have sold pickups in the U.S. market for many decades, almost all the current models sold in the U.S. are built domestically, with enough U.S.-sourced content to qualify as "domestic" vehicles.
But if Japan is accepted as a party to the 11-nation Trans-Pacific Partnership trade talks, the decades-old chicken tax could be finally consigned to the history books after a protracted phase-out period. Not surprisingly, Michigan lawmakers and domestic automakers are vocal in their opposition to the inclusion of Japan in the trade talks, claiming the heavily export-dependent nation has long had a notoriously closed domestic auto market that heavily favors its own companies.
Japan counters that it is willing to review and negotiate changes of its non-tariff regulations seen as barriers to sale of U.S.-built vehicles in Japan as part of its so-called Preferential Handling Procedure. The change would allow the export of up to 5000 units of each vehicle type approved under the PHP program from the U.S. to Japan. Approval to let Japan join the trade talks requires unanimous approval of all nations involved, which in addition to the U.S. includes Canada, Mexico, Australia, New Zealand, Singapore, Brunei, Malaysia, Vietnam, Peru, and Chile.
Source: Reuters, Automotive News (subscription required)