Japan Entering Free Trade Zone Talks with 10 Pacific Nations

Earlier this summer, the Japanese Yen traded at over 100 to the US dollar for the first time in about a decade. It is just one example of Japan’s Prime Minister Shinzo Abe’s attempts to end 15 years of deflation in the Japanese market. His strategy has been to weaken the yen against the dollar and euro to make exported goods cheaper. His next attempt is to craft a free trade in Asia that would help exporters, especially automakers even more.

"For the first time, people are seriously thinking that we need to change some things. Otherwise we will become second-rate citizens of the world,” said Japanese ambassador to the United States Kenichiro Sasae.

The free trade agreement would have 12 nations create a Pacific free trade zone worth an estimated $26 trillion a year. The countries include the United States, Japan, Canada, Australia, Malaysia, New Zealand, Mexico, Chile, Peru, Brunei, Chile and Singapore.

Ford, GM and Chrysler all oppose the deal saying that the Japanese government is unfairly manipulating its currency and harming imports. However, the US government has prevented foreign pickup trucks from coming into the US by using high tariffs since the 60s.

The nations hope to have a deal finalized by the end of the year.

The deal would especially help automakers because they could export cars without any tariffs. It could mean lower prices for consumers and higher profit margins for makers.

Source: Automotive News Europe