Japan put its seal on the world’s largest free trade agreement earlier this week. The Regional Comprehensive Economic Partnership (RCEP) was concluded in November last year between 15 countries in Asia and the Pacific. Remarkable, given the historically strained relations with Japan: China is participating as well.
The deal was approved by the country’s parliament, known locally as the Kokkai (literally: Reichstag). Who reported the Japanese news agency Kyodo News. The agreement is expected to enter into force at the end of this year.
When fully operational, RCEP will establish a free trade area comprising about 30 percent of the world’s GDP, trade and population. This will make it the world’s largest trade deal in modern history.
China, Australia, Japan, New Zealand, South Korea and 10 members of the Association of Southeast Asian Nations (ASEAN) including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam are members of RCEP.
China and South Korea as partners
Japan is involved for the first time in a trade agreement with China and South Korea as partners, the former being the first trading partner and the latter the third.
Tokyo expects the deal to boost the economy by 2.7%. The East Asian island state estimates that it will create around 570,000 jobs.
Tariffs on 91 percent of goods are expected to be phased out among member states, while allowing “common rules on investment and intellectual property to promote free trade.”
So far, China, Thailand and Singapore have fully ratified the agreement. Once six of the ASEAN members and three non-ASEAN members have ratified the RCEP, it will enter into force within 60 days.