Obama, GM Don't Agree on Everything

While it sometimes may seem that General Motors (GM) and the Obama administration are joined at the hip, the two parties diverge on whether Japan should be included in a Pacific Rim free trade agreement.

U.S. Trade Representative Ron Kirk last week welcomed Japan's request to join talks, led by the U.S., on a nine-nation Trans-Pacific partnership. "Japan's interest in the TPP demonstrates the economic and strategic importance of this initiative to the region," Kirk said.

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"To join the negotiations, Japan must be prepared to meet the TPP's high standards for liberalizing trade and to address specific issues of concern to the United States regarding barriers to agriculture, services, and manufacturing trade, including non-tariff measure," Kirk continued.

Nevertheless, the Detroit Three, the United Auto Workers, and Michigan's two Democratic senators have expressed opposition to Japan's inclusion. The American Automotive Policy Council, which represents the Detroit Three in Washington, issued a statement on Friday.

"Japan remains the most closed auto market among developed nations," said AAPC president Matt Blunt. "One way trade in autos accounted for 70% of the U.S. trade deficit with Japan in 2010. In fact, Japan already ships more than 200 cars to the U.S. for every one car the United States sends there."

Blunt said that including Japan in the talks would not only delay progress but would also sanction its trade practices. "Japan should demonstrate they are serious about opening their market before the United States grants additional trade benefits," he said.

A GM spokesman said the AAPC position represents the company's position, while Ford (F) issued a statement that voiced similar themes.

Calling Japan "the world's most protectionist economy," Ford declared: "A one-sided free trade agreement with Japan will lock in a relationship that has already created a $50 billion U.S. trade deficit. Even worse, it will completely erase the competitive gains that are allowing U.S. automakers to create thousands of new jobs here at home and bring work back from overseas."

As he seeks re-election, Obama has emphasized the auto industry's recovery, which may be seen as one of his most important accomplishments. He visited Detroit on Labor Day and he visited Toledo, Ohio, where Chrysler and GM are both expanding, in June.

The UAW has been a fervent Obama supporter, repeatedly crediting the president for the auto industry's recovery as it announced labor deals with each of the Detroit Three this fall.

The relationship between the president and the automaker is so strong that some Obama opponents say they will not buy GM vehicles.

On Saturday, the concept of the deal was approved by the nine countries: the U.S., Australia, New Zealand, Vietnam, Malaysia, Singapore, Brunei, Chile and Peru. On Sunday, Canada and Mexico said they also would like to be included. China has been opposed, however, apparently seeing the agreement as a threat.