The government has estimated that a bilateral trade agreement Japan recently signed with the United States will push up gross domestic product by around 0.8 percent, officials said Friday.
If calculated in terms of the nation’s GDP in fiscal 2018, the increase amounts to about ¥4 trillion ($37 billion). The government predicts the creation of some 280,000 jobs as a result of the trade deal.
Yasutoshi Nishimura, 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 be agreed. One of the trade deal’s annexes stated that duties on autos “will be subject to further negotiations.”
The government said the output of agricultural and fishery products will likely decrease by between ¥60 billion and ¥110 billion, as cheaper U.S. imports, including beef and pork, are expected to enter Japan’s market.
The bilateral pact will enable U.S. farmers to enjoy the same treatment in some areas as their competitors in Australia, Canada and New Zealand, all of which are members of the 11-nation Trans-Pacific Partnership free trade pact from which Washington withdrew in 2017 under U.S. President Donald Trump.
Previously, the government had said the U.S. 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 in 2017, 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 U.S. deal before the ongoing extraordinary session ends on Dec. 9, in time for Jan. 1 when Washington wants the pact to come into force.