All national dailies wrote that the Ministry of Foreign Affairs announced on Wednesday that the 15-nation Regional Comprehensive Economic Partnership (RCEP), involving Japan, China, South Korea, ASEAN nations, and others, is set to take effect on Jan. 1, 2022, following the completion of its ratification by Australia and New Zealand on Tuesday. The papers wrote that the world’s biggest free trade agreement, which accounts for one-third of global GDP and trade, will eventually eliminate tariffs on 91% of all industrial goods within the framework.
Nikkei wrote that the GOJ estimates that RCEP will lift Japan’s GDP by about 2.7% through increased exports and expects that the trade deal will bring about more economic benefits to Japan than the TPP because although RCEP’s 91% tariff elimination rate is lower than the TPP’s 99.9%, 86% of exports to China and 92% of exports to South Korea will become tariff-free as opposed to the current 8% and 19%. The paper also wrote that the deal is expected to benefit Japan’s growing electric vehicle sector because although some EV motors for the Chinese market faced a tariff of up to 12% as of the date of negotiations, this will be scrapped in stages over 16 or 21 years. The 6% tariff on certain lithium-ion batteries will also be scrapped over the course of 16 years. However, the paper also wrote that it will take time for the pact’s full impact on regional trade to be felt because many tariffs will be phased out gradually. The daily noted that addressing China’s increased economic and military influence in Asia will also be a challenge for Japan. A Japanese trade negotiator told the paper that China’s compliance with RCEP rules will be one of the tools Japan will use to decide whether China should be allowed to join the TPP.
Yomiuri wrote that the new trade agreement is expected to rebuild supply chains and promote investment and trade in the Asia-Pacific region.