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Japan estimates trade pact with U.S. to raise GDP by 0.8%

  • October 18, 2019
  • , Kyodo News , 3:20 p.m.
  • English Press

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 said Friday.

 

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.

 

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.

 

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 11-nation Trans-Pacific Partnership free trade pact that Washington withdrew from in 2017 under President Donald Trump.

 

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.

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