TOKYO: A bilateral trade agreement Japan recently signed with the United States is estimated to push up the Asian country’s gross domestic product by around 0.8 percent, the Japanese government says.
If calculated in terms of Japan’s GDP in fiscal 2018, the estimate amounts to about 4 trillion yen ($37 billion). The government predicts the creation of some 280,000 jobs as a result of the trade deal, report agencies.It said the output of agricultural and fishery products will likely decrease by between 60 billion and 110 billion yen as cheaper U.S. imports, including beef and pork, are expected to enter the Japanese market.
Domestic output of beef is forecast to fall by up to 47.4 billion yen, while that of dairy products such as cheese is projected to drop by up to 24.6 billion yen.
Output of pork is likely to decline by 21.7 billion yen.
The bilateral pact will enable U.S. farmers to enjoy the same treatment as their competitors in Australia, Canada and New Zealand, all of which are members of the Trans-Pacific Partnership, an 11-nation free trade pact that Washington withdrew from in 2017 under President Donald Trump.
Together, the Japan-U.S. trade deal and the TPP, which came into force last December, are likely to dent Japan’s farm products by up to 200 billion yen, according to the estimate.
Yasutoshi Nishimura, Japan’s minister in charge of economic and fiscal policies, told a news conference that the figures were calculated on the assumption that U.S. tariffs on Japanese cars and auto parts will be scrapped, although this has yet to happen under the current version of the agreement.The fate of those duties has not been decided as one of the trade deal’s annexes stated that they “will be subject to further negotiations.”
Previously, the Japanese government said the pact would give a boost of around 1.0 percent to the world’s third-largest economy in terms of real GDP.
The percentage was calculated by subtracting 1.5 percent, the estimated economic effect after the U.S. pullout from the TPP, from the 2.6 percent boost expected if Washington stayed in.
Prime Minister Shinzo Abe’s government aims to secure parliamentary approval of a bill to ratify the deal before the ongoing extraordinary session ends on Dec 9, in time for Jan. 1 when the United States wants the pact to come into force.