ATLANTA -- Vietnam and Canada are expected to agree to eliminate import tariffs on Japanese automobiles within 10 years of a Pacific Rim trade deal coming into force.
Trade ministers from the 12 countries negotiating the Trans-Pacific Partnership made progress toward freeing up automobile markets during two days of talks here. They have decided to extend their meeting by a day to Friday to seek a broad agreement on the trade and investment initiative.
Vietnam stands ready to phase out its 70% tariff on Japanese autos for vehicles with 3-liter or bigger engines within a decade. Canada would drop its 6.1% levy on Japanese autos over several years.
Japan and the U.S., its biggest export market for automobiles, have reached a compromise that would immediately eliminate a 2.5% U.S. tariff on more than 80% of Japanese-made autoparts. The tariff on finished Japanese autos would be phased out over 30 years or so.
All this would lower barriers to Japanese carmakers in both the mature North American market and up-and-coming Vietnam. Japanese automakers' market share in Mexico grew immediately after a bilateral economic partnership agreement took effect in 2005.
Japan is still negotiating with Mexico and other prospective TPP members on how much of an auto's parts need to be made within the trade zone for it to qualify for tariff exemption.