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Japan approves far-reaching RCEP free trade deal

Japan approves far-reaching RCEP free trade deal

29-Apr-2021 Intellasia |
JapanTimes |
5:02 AM

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The Diet, Japan’s parliament, on Wednesday approved the Regional Comprehensive Economic Partnership free trade deal among 15 Asian and Oceanian countries.

The RCEP deal was approved at a plenary meeting of the House of Councillors, the upper chamber of the Diet. The House of Representatives, the lower chamber, gave its approval earlier this month.

Under the deal, which will create a huge free trade area accounting for some 30 percent of global gross domestic product and trade, tariffs will be abolished for 91 percent of products, mainly industrial items.

RCEP groups the 10 member states of the Association of Southeast Asian Nations Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam plus Japan, China, South Korea, Australia and New Zealand.

India was one of the founding members but skipped all negotiations from November 2019 due to concerns that its trade deficit with China would grow.

The deal will be Japan’s first economic partnership agreement involving China or South Korea.

The pact will come into force after necessary domestic procedures are completed in at least six of the Asean member states and three other countries.

The free trade deal is a wide-ranging agreement calling for abolishing tariffs on industrial goods, including automobiles, and agricultural products, and writing new rules for e-commerce and intellectual property protection.

Japan managed to have five agricultural product categories considered sensitive for the country rice, wheat, beef and pork, dairy products and sugar exempted from tariff cuts.

Under the deal, food tariffs will be eliminated gradually, including China’s tariffs on scallops and Indonesia’s tariffs on beef.

Japan will scrap its tariffs on Shaoxing rice wine from China and makgeolli alcoholic drinks from South Korea.

China and South Korea will abolish their tariffs on auto parts in stages. Over some 20 years, the proportion of industrial products exempted from tariffs will rise from 8 percent to 86 percent for China and from 19 percent to 92 percent for South Korea.

The Japanese government hopes to put the pact into effect as early as possible as it expects the deal to increase the country’s real GDP by 2.7 percent and create 570,000 jobs.

Category: Japan

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