The Japanese government released an estimate on March 19 that if Japan joins the regional comprehensive economic partnership agreement (RCEP), it is expected to push Japan’s GDP by about 2.7 percent, up by about 15trillion yen in 2019, according to Japan’s real GDP. The main reason is that this will be the first trade agreement signed between Japan and China and South Korea, with higher economic effect than other large-scale trade agreements such as the trans Pacific Partnership Agreement (TPP).
From the perspective of the composition of economic effects, export is 0.8%, investment is 0.7%, and private consumption is 1.8%. Employment is expected to increase by about 0.8 per cent, to some 570000 in 2019.
According to the previous estimate of the Japanese government, Japan’s accession to TPP will push GDP up by about 1.5%, and even if the United States rejoins the agreement, it can only push Japan’s GDP up by about 2.6%. Japan’s economic cooperation agreement with the European Union (EPA) is expected to push GDP up by about 1 per cent. The most effective RCEP is largely because it is the first time Japan has signed a trade agreement with China, the largest trading partner and South Korea, the third largest trading partner.
RCEP is the largest free trade agreement in the world, which is attended by 15 countries, including China, Japan, South Korea and ASEAN. It is expected that Japan’s accession to the agreement will also be approved by Congress and will come into force by the end of 2021 as soon as possible.