The Truth About Japanese Import Quotas: There are none

Misleading picture: Ship brings cars from Yokohama to Kyushu

Misleading picture: Ship actually brings cars from Yokohama to Kyushu

Sometimes, when I read Detroit’s shrill anti-Japanese propaganda these days, only a quick look on the calendar assures me that it’s no longer 1941. The degree to which the toxic bombast has poisoned the ADHD-afflicted minds of our youth became evident again yesterday, when the alleged Truth About Cars wrote that “a new quota on U.S. imported cars was struck down as part of trade negotiations with Japan. In exchange, Japan will buy more American rice.”

Jalopnik followed Detroit one step further into the deep shit, and wrote: ”U.S. automakers are limited to selling just 5,000 cars a year in Japan.”

None of this is true. Brains have become collateral damage of Detroit’s propaganda war, and that’s a charitable assumption. I had to look at the calendar again. To my surprise, yesterday was January 27, 2015. Speaking of ADHD, let’s get two things out of the way, quickly, before attention dissipates:

There are no quotas on car imports to Japan. No old ones, no new ones. Japan also won’t buy more rice, at least not now.

While Ed Niedermeyer and I did our tours of duty at TTAC, we tried to teach editors to seek the truth, and to get as close to the source as possible. We both failed. A lazy TTAC completely misquoted the Detroit News, which already had misquoted Japan’s Nikkei Asia Review. Said the DetN:

“Nikkei Asian Review reported the U.S. Trade Representative Michael Froman’s office will end efforts to convince Japan to drop standards on car imports in exchange for Japan’s agreement to import an additional 10,000 tons of U.S. rice.”

Please stop laughing, this is serious. It displays Detroit’s mindset, and its definition of a fair deal: Japan lowers its standards, AND it buys more American rice, in return for nothing. The DetN found nothing wrong with that kind of thinking. Of course, it’s not rice, it’s baloney. Going straight to the source, namely the Nikkei Asia Review, one would read:

“The Japanese government will likely increase the tariff-free quota for imported rice and import more than 10 thousand tons of additional rice from the U.S., according to sources.

The U.S. has also ceased its request that Japan ease its strict standards imposed on car imports, according to sources.”

So according to the oft-cited, but consistently misquoted Nikkei, Japan dangles the possibility of buying another 10,000 tons of tax-free rice from U.S. farmers, double the 10,000 tons it already takes. Japan says it would take the extra 10,000 tons if the U.S. signs the Trans Pacific Partnership deal. Until then, no dice, no rice. Of course, American farmers would love to export much more. “Washington has so far urged Tokyo to increase this amount to about 200,000 tons,” the Nikkei said. As often reported at The DailyKanban, Japan’s interest in joining the TPP has cooled down a lot. 10,000 tons of rice, worth about $40 million, or 800 fully loaded F-150, both  at overpriced retail, is about all that watered-down TPP deal is worth in Tokyo’s eyes.

About the lowering of the strict standards, which the U.S. is no longer after, the Nikkei wrote:

“Meanwhile, the U.S. government has withdrawn its demand for easing Japan’s safety and environmental standards for automobile imports. Until recently, the U.S. had called on Japan to ease standards for auto safety, engine displacement category and eco-friendly features, demanding that Tokyo should allow imports of American automobiles that meet U.S. standards.”

I can see how that discussion went. DC: “Drop your standards!” Tokyo: “Drop yours, and we drop ours!” DC: “Drop ‘em, I said! On your knees!” Tokyo: “Drop dead.”

This is how it goes, and it always will. As we wrote last month, American safety and emissions regulations aren’t necessarily better than those in Europe or Japan, however, they are immensely different, and none of the parties involved want to blink first. Realizing the futility, Washington dropped the demands, and kept its standards on.

So then, where are those quotas? Nowhere, they are totally made up.

There are no quotas. You and I, Detroit and Wolfsburg, can bring any amounts of cars into Japan. Actually, it is much easier to bring the cars to Japan than to the U.S. As explained a month ago, Japan has a rule that allows 5,000 of those cars, per year and model, to be brought in with total disregard for standards, safety rules, or paperwork. Likewise, the EC Small Series Type Approval (EC SSTA) allows up to 1,000 cars per year and model onto European roads with only the barest of paperwork. There is no such thing in the U.S.

The alleged and grossly misunderstood “quotas”  blog after blog brought up, are not mentioned in the Nikkei story. Car quotas aren’t mentioned by the DetN either. However, the DetN led our blogging youth astray when the Detroit paper wrote:

“In April 2013, Japan announced it would more than double the number of motor vehicles eligible for import under its fast-track rules. Detroit’s Big Three automakers are now be allowed to export up to 5,000 vehicles annually of each vehicle type under the program, compared with the prior ceiling of 2,000 vehicles per vehicle type.”

Correct, as long as you know what “fast-track rules” mean: “Please, do come in. No crash test, no problem. Steering wheel on the wrong side? Who cares. Emissions too high? Never mind. This way, dozo kudadsai. Bring in more than 5,000 cars per year and type, then, gomen ansai, we have to ask you to adhere to the rules Japanese manufacturers have to follow for all their cars.”

Calling 5,000 cars a “quota” if they can be brought in without safety tests, or adherence to emission standards, is either an intentional bald-faced lie, or utter stupidity. If you don’t know the difference between a “quota” and a low volume loop-hole as big as a barn door, then you don’t know what you are writing about. Focus on Hellcats and GTs, stop writing about the car business, and you will look awesomely smart. I know, it’s hard to believe that the nasty Nips let cars into their supposedly closed market with the barest of paperwork, while in the Land of the Free, imported Defenders get crushed if they are younger than 25 years, but life is full of surprises, and it is what it is.

And do you know what’s the saddest part of this Kafkaesque drama? The minds of our youth are poisoned for nothing. Detroit’s war against Japanese imports is a war against an enemy who has long given up. Most “imports” are already made in America, and the trend is unstoppable. In 2014, when the Japanese currency finally became cheaper, therefore making Japan-made cars more competitive abroad, what happened to exports from Japan? Of course they went up, no? No, they did not.

Last year, Toyota’s Japanese production actually decreased by 1.8 percent, elsewhere in the world, production by Japanese automakers rose by 4.2 percent.

Today is numbers day in Tokyo, and as each month, Japanese automakers send me detailed stats about global sales and production in a consistent, tabulated, and mostly spin-free format. (Are you listening, GM and Tesla?) Nissan sent me this interesting chart:

The honest truth about those rising car exports

The honest truth about those rising car exports

Nissan’s car exports were down nearly 13 percent in 2014, those to  North America were down a whopping 37 percent, while overseas production rose 6 percent. Of course, I am cherry-picking again, some will say. No, I don’t.

Automobile exports from Japan, all automakers, to ….
Period ASIA MidEast EUR North Am Cent Am South Am Africa Oceania Others Total
Dec 2012-Nov 2013 532,513 579,295 715,099 1,900,009 157,587 209,843 179,705 415,832 5,123 4,695,006
Dec 2013-Nov 2014 567,308 619,249 749,052 1,654,013 142,975 164,751 182,016 377,103 7,337 4,463,804
YoY 6.5% 6.9% 4.7% -12.9% -9.3% -21.5% 1.3% -9.3% 43.2% -4.9%

 

On a global basis, Japan’s auto exports decreased nearly 5 percent last year, data by JAMA say. Exports to North America even dropped nearly 13 percent. At the same time, imports to Japan grew 3.4 percent to 360,000 foreign cars. Facts that won’t keep Detroit dunderheads and its associated dunces from writing total nonsense, I am afraid.

P.S.: Interesting data-point in that JAMA table: Japan’s exports to Europe are only double Japan’s imports (most are from Europe.)  The EU’s population is four times that of Japan. Customers in both regions are happy with what they have at home, and only rarely go for the exotic thrill.

P.P.S: The Nikkei also isn’t infallible. The quoted Michael Froman told the Senate Finance Committee that the misreported Nikkei report itself was “categorically wrong.”