Japan Parliament approves RCEP free trade deal with China and ASEAN
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Japan Parliament approves RCEP free trade deal with China and ASEAN

The Parliament of Japan (Diet) on Wednesday approved the Regional Comprehensive Economic Partnership (RCEP) free trade deal at a plenary meeting of the House of Councillors (upper chamber of Diet). The move follows the Japanese Cabinet’s decision to approve the ratification in February.

RCEP is touted as one of the world’s largest free trade deals and has been signed by 15 countries in the Asia Pacific region, including China, South Korea, Australia and the 10-member ASEAN comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The agreement aims for the gradual elimination of tariffs on industrial goods and agricultural products. It also incorporates new rules for intellectual property and e-commerce. Japan has negotiated the exclusion of five sensitive agricultural products such as rice, wheat, beef and pork, dairy products and sugar from tariff cuts.

RCEP has been in negotiations since November 2013 and was signed recently on November 15. It will form a free trade zone covering over 2.2 billion people and 30 percent of the world’s global gross domestic product. It will also be Japan’s first trade deal with China, which is also its largest trading partner, or South Korea, which is its three-largest trading partner.

The Peterson Institute for International Economics (PIIE) has estimated that RCEP will increase global GDP by $186 billion a year and yield large benefits for China, Japan and South Korea. It is also expected to raise the economic interdependence of the Asia Pacific by increasing trade among members by $428 billion and reducing trade among nonmembers by $48 billion. The Japanese government itself expects the agreement to boost the country’s real GDP by 2.7 percent and create 570,000 jobs.

RCEP has already been ratified by China, Singapore and Thailand. The agreement will come into force sixty days after it has been ratified by at least 6 ASEAN states and 3 other member states.