Japanese government: RCEP trade could increase Japan's GDP by $140 billion

Japan's domestic economy could grow by about 2.7% as 15 Asia-Pacific countries signed the world's largest free trade agreement (RCEP) last year, the government said on Friday , The Japan Times reported .

According to data from relevant Japanese ministries, the expected economic effect of the Regional Comprehensive Economic Partnership involving Japan, China and South Korea is equivalent to an increase in Japan's gross domestic product ( GDP ) of approximately 15 trillion yen (US$140 billion), calculated based on the country's real GDP in fiscal 2019.

The Japanese government on Friday released its first estimate of the impact of the multilateral trade pact covering about a third of the world's trade and population, predicting the deal will create about 570,000 jobs , a higher expected increase than the government had previously expected .

Previously, the Japanese government had expected the Trans-Pacific Partnership (TPP) , consisting of 11 member countries, and the Economic Partnership Agreement of the European Union to increase by 1.5% and 1.0% respectively, while the RCEP is expected to increase by as much as 2.7%.

A Japanese Foreign Ministry official told reporters that they acknowledged that RCEP "could have a significant impact on the economy" and that it would "cover 46% of Japan's total trade . " In comparison, the TPP accounts for about 15% and the Japan-EU EPA only accounts for 12%. But the official added that the impact of RCEP trade will take "considerable" time to fully appear.

The RCEP trade deal, signed in November last year , will eliminate tariffs on 91 percent of goods and set common rules on investment, intellectual property and e-commerce. It is expected to reinvigorate the region's supply chains and make them more efficient for businesses.

In addition to the three East Asian countries, RCEP also includes Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations (ASEAN). The agreement will come into force once any six members of ASEAN and the other three countries ratify it.

The latest data released by the Japan Center for Economic Research showed that Japan's real GDP in January this year fell by 0.8% compared with the previous month. Faced with the current economic predicament of Japan, Japan said it is ready to call on other RCEP member countries to speed up their domestic procedures so that the agreement can take effect as soon as possible.

Japan

RCEP

Economic growth