TOKYO: Japan’s government says the domestic economy could be boosted by about 2.7 percent as a result of the world’s largest free trade deal signed by 15 Asia-Pacific nations last year.
Calculated in terms of the country’s real gross domestic product in fiscal 2019, the expected economic effect from the Regional Comprehensive Economic Partnership, involving Japan, China and South Korea, corresponds to a GDP increase of around 15 trillion yen ($140 billion), according to relevant Japanese ministries, report agencies.In its first published estimate of the impact of the multilateral trade pact covering about a third of global trade and population, the government predicted around 570,000 jobs would be created.
The projected boost is larger than the government’s previous estimates of a 1.5 percent increase from the 11-member Trans-Pacific Partnership and a 1.0 percent rise from the economic partnership agreement with the European Union. The estimates for the TPP and the pact with the European Union were released in December 2017.
Acknowledging that the RCEP “could affect the economy significantly,” a Foreign Ministry official told reporters it “will cover around 46 percent of Japan’s total trade, compared with about 15 percent in the case of the 11-member TPP and about 12 percent in the case of the Japan-EU EPA.”
But the official added it would take a “considerable” period of time for the impact to fully materialize.
Signed last November, the deal will eliminate tariffs on 91 percent of goods and set common rules on investment, intellectual property and e-commerce. It is expected to reinvigorate supply chains in the region and make them more effective for businesses.