politics

Japanese businesses expect RCEP deal to boost Asia trade, investment

18 Comments

Japanese business leaders welcomed the signing of the world's largest trade deal by Tokyo and 14 other Asia-Pacific partners on Sunday, expecting a boost in trade and investment in the region and strengthening of supply chains.

"The signing is extremely significant toward realizing a free and open international economic order" at a time when some countries are becoming inward-looking due to the global coronavirus pandemic, said Hiroaki Nakanishi, chairman of the Japan Business Federation known as Keidanren.

The Regional Comprehensive Economic Partnership, covering some 46 percent of Japan's total trade, will be the country's first trade deal with both China, its largest trading partner, and South Korea, its third largest.

Under the deal, Japan will see tariffs eliminated on 86 percent of items exported to China, 81 percent to South Korea and 88 percent to the countries of the Association of Southeast Asian Nations, Australia and New Zealand.

RCEP also sets common rules on e-commerce, intellectual property, customs and rules of origins.

Due to the rules and lowering of tariffs, supply chains established by Japanese companies in Asia "will become more broad, effective and resilient," Akio Mimura, chairman of Japan Chamber of Commerce and Industry, said in a statement.

The 15 signatories to the deal said Sunday the pact remains open for India, which has skipped all negotiations since late last year due to concerns about opening up its market to China, and included provisions that would facilitate the Southern Asian country's smooth participation should it decide to return to the pact.

"We hope RCEP members will tenaciously encourage" India's return to the pact, which will contribute to strengthening supply chains encompassing the region, said Ken Kobayashi, chairman of the Japan Foreign Trade Council.

Among the agreements on market access with China, the world's second-largest economy will incrementally eliminate the 40 percent tariff it imposes on Japanese sake over 21 years after the deal takes effect.

China will also remove tariffs on some 87 percent of Japanese auto parts, steel products and household appliances, making 86 percent of Japan's China-bound industrial goods tariff-free as a result, sharply up from 8 percent.

Japan will remove tariffs on 49 percent to 61 percent of agricultural and fisheries products, but excluding five sensitive product categories -- rice, wheat, dairy products, sugar, and beef and pork -- and 47 percent to 99.1 percent of industrial goods.

RCEP consists of 10 ASEAN countries -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- plus Japan, China, South Korea, Australia and New Zealand. Japan has free trade frameworks in effect with ASEAN, Australia and New Zealand.

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18 Comments
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Is this not helping China?

1 ( +3 / -2 )

These trade pacts only serve the politicians and rarely or never deliver any practical returns. Certainly not for the consumer. The free trade agreement between the EU Nd Japan is a lot of noise about nothing. China will promise more and lie more.

0 ( +2 / -2 )

China will also remove tariffs on some 87 percent of Japanese auto parts, steel products and household appliances, making 86 percent of Japan's China-bound industrial goods tariff-free as a result, sharply up from 8 percent.

Appears to be significant. More of these exports will be copied and eventually produced in mainland China.

3 ( +3 / -0 )

And it probably means more cheap priced fruits and vegetables exported from Japan and more high prices for us living in Japan, while already all over Asia you buy Japanese fruit and vegetables at half price or less from Japan.

3 ( +4 / -1 )

Is this not helping China

I think China will not benefit.

but during the trade war with USA, China must have been struggle and ended up joining in RCEP. Lots of product will have lower tariffs then China will face trade loss.

Japan have to show a leader ship and it’ll the best way for democratic counties to transfer supply chain to APAC.

-1 ( +2 / -3 )

No mention of the effect on workers' wages, but that's the last thing on these officials' minds.

2 ( +3 / -1 )

RCEP will prove mainly to China's advantage. China should be boycotted, especially as it has no remorse for destroying the peoples and economies of every country whether accidently or on purpose. Personally I now avoid where possible buying any Chinese products, but it seems that many Japanese companies are in the pockets of Chinese manufacturers and there are no alternative suppliers.

1 ( +2 / -1 )

Trade deals grow the economy... by helping the rich and large corporations. Trade deals always negative for the common people

-1 ( +1 / -2 )

Trades benefits both parties, supply and demand.

China opening up their large market, in fact is benefiting other smaller countries. China's market is on a different scale than the other members.

Saying this benefits China only is same as saying Trump's tariffs is MAGA.

1 ( +1 / -0 )

No tariffs benefits consumers

1 ( +1 / -0 )

Trade deals always negative for the common people

How do you get this conclusion? Under rcep Japan will remove tariffs on 49 percent to 61 percent of agricultural and fisheries products, which means common Japanese people can buy food at a lower price in the near future.

0 ( +0 / -0 )

China and Vietnam won bigly.

RCEP has no reinforcing mechanism, is prone to cheating. Especially, it has no clause on intellectual properties. Yes! Now people in Asia will freely pirate Japanese mangas and animes with no problem.

China will seize the means of production and take over all high-end manufacturings, the breads and butters of Korean and Japanese economies.

Vietnam will flood the Asian markets with their own medium-to-small value goods. Vietnam will dump steels, woods, plastics,...upon the ASEAN and Japan with no issue. No more tariffs, Vietnam will flood everything with the aids of Chinese supply chains.

Trade deals always negative for the common people

Negative towards the developed economies like South Korea and Japan who aren't prepared against dumping juggernauts of China and Vietnam. Workers in SK and Japan will suffer the worst as their companies can't compete against cheap and efficient companies of China and Vietnam.

I once visited a solar factory inside a mountain in China. Their facility is so massive that it took most of the mountain underground. This factory is responsible for ending Japanese dreams of solar energy dominance. Panasonic can't compete against Chinese economy of scopes and scales.

Meanwhile, Vietnamese people aren't on par with China but they are clever to utilize Chinese supply chains for their benefits. For example in steel industry, Vietnam buys Chinese raw materials and manufactures into real steels with much cheaper values. Vietnamese steelmakers proceed to dump their steels upon all ASEAN economies so bad that all companies in ASEAN are calling their governments to bar Vietnamese steel. Even the US took action against Vietnamese steel dumping with 453% tariffs. Meanwhile, Japan and South Korea have seen Vietnamese steel dumping before, but neither of them takes an action.

Personally I now avoid where possible buying any Chinese products, but it seems that many Japanese companies are in the pockets of Chinese manufacturers and there are no alternative suppliers.

True. Additionally, Japanese government pretty much allows China to plunder whatever left of Japanese economy. China is now owning all important assets, real etstate, in Japan. Meanwhile, Keidanren is so addicted to China that they put all of their important factories in China. Nissan is now going to focus all of its business into China, no wonder why Ghosn considers it is going to bankrupt in the next 2 years.

1 ( +1 / -0 )

"We hope RCEP members will tenaciously encourage India's return to the pact, which will contribute to strengthening supply chains encompassing the region"

India will not return since RCEP covers mostly manufactured goods and India is trying to bring its own manufacturing sector up to scale to reduce cheap imports from China. RCEP does not cover services sector which is India's strong point. Moreover, India needs to protect its agricultural and diary sector which employs millions of people who may be out of jobs if the Indian market gets flooded with diary products from Australia and NZ.

1 ( +1 / -0 )

Intensely dancing with those communists will make your feet severely hurt. Know that beforehand. I just told you it.

1 ( +1 / -0 )

Michael Hooper. I fully agree. This deal will only benefit China. It will flood the Asian markets with cheap products manufactured in China. Smaller Asian countries can not simply compete with the giant. I have been boycotting all Chinese products for years. I am surprised the Japanese government can be so naiive towards China's selfish intentions.

1 ( +1 / -0 )

China has already been suffering from job losses to ASEAN because they already gave a free trade deal with each other, many manufacturers have moved to Vietnam to avoid the Trump tariff.

This deal will make them bleed jobs even faster, plus they will have to open their market for Japan.

Great news for Japan now that tourism economy is basically dead

-1 ( +0 / -1 )

Geopolitically, this deal won't change a thing. India will become the next powerhouse of Asia, it's of the highest interest for Japan and the US

-1 ( +0 / -1 )

What can Japan do ? The fate of Japan is fixed, there is no other ways, as simple as that.

-1 ( +0 / -1 )

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