The United States has strongly urged Japan to take additional steps to include more U.S. cars in the government's subsidy program for purchasing eco cars, including reviewing its method for measuring fuel efficiency, according to sources.
Deputy U.S. Trade Representative Demetrios Marantis made the demand at a Japan-U.S. working-level meeting held Monday in Tokyo, the sources said.
The Japanese government reportedly refused to accept his request, but this latest development indicates the eco car program might lead to new trade friction between Japan and the United States.
On Jan. 19, the government announced it would ease conditions for the program to include imported vehicles. Tests of fuel efficiency, required to qualify for the program, currently must be done in Japan, but under the relaxed terms, the government will accept the findings of such tests conducted in the United States.
The government will adopt a system to measure fuel efficiency based on cars' fuel consumption in urban areas, but Marantis reportedly urged the government to calculate efficiency by combining data on fuel consumption in both urban areas and on expressways.
Marantis' aim is to increase the number of U.S. cars on the list of eligible vehicles. If data are used from both urban areas and expressways, the data taken on expressways will account for between 60 percent to 70 percent of the total.
Cars assessed in this way will be deemed more fuel-efficient than if they were judged based on urban areas alone, which would subsequently increase the number of U.S. cars eligible for the program.
Protectionist trend in Congress
By Koichi Uetake
and Akihiro Okada
Yomiuri Shimbun Staff Writers
Washington's latest calls for Japan to take additional measures to ensure Tokyo's eco-friendly car purchase incentive program covers more U.S.-made automobiles apparently indicates that the U.S. administration can no longer disregard growing antiforeign protectionist pressure at home, according to analysts.
The U.S. government has been increasingly frustrated with the gap in the advantages enjoyed by Japanese and U.S. cars under the current incentive program. Few U.S. models would be eligible for subsidization even under a newly relaxed fuel-efficiency measurement devised for the scheme.
The gap could grow into a renewed trade dispute between the two nations, observers said.
During working-level talks in Tokyo on Monday, Deputy U.S. Trade Representative Demetrios Marantis raised questions about the fuel-efficiency measuring formula used under the purchase incentive plan. Initially, no U.S. model was found eligible for subsidy under the program.
In Monday's meeting, Marantis urged Japan to review the fuel-efficiency measurement and thereby expand the list of cars covered by the program to include more U.S models.
According to an Economy, Trade and Industry Ministry estimate, about 90 percent of U.S. cars would be eligible for subsidization if their fuel efficiency is measured at the time of a high-speed drive on a highway. The figure would stand at 70 percent to 90 percent if fuel mileage is measured for a high-speed highway drive combined with an urban-area drive, and about 50 percent for an urban-zone drive.
If Japan relaxes its fuel-efficiency measurement method exclusively for U.S. cars, it means domestic automobiles and European models will be unfairly treated in determining their fuel mileage. With this in mind, the government likely will adhere to its initial plan--that is, determining the eligibility of each model for the subsidy by measuring its fuel mileage for an urban-area drive.
All this has been combined with an expanding protectionist pressure evident in the U.S. Congress. This comes after such a sentiment was prevalent only among some die-hard protectionist congressmen until recently.
Some lawmakers are seeking to make sure employment-promotion legislation under discussion incorporates a buy-American provision.