Japan has ratified updates to its comprehensive economic partnership deal with the 10-nation Asean bloc, with the changes to come into force on Aug 1, Japan’s Ministry of Foreign Affairs (Mofa) said in a statement yesterday.
These amendments are the first since the pact was enacted in 2008, becoming Japan’s first multilateral trade deal. It had focused on eliminating tariffs on goods.
Known as the First Protocol, it adds provisions that cover cross-border trade in services and investment between Japan and Asean. It includes rules and liberalisation commitments from Asean member states which have not been included in bilateral trade deals concluded between Japan and each Asean member state, the statement said. The document will first apply to Japan and the four Asean countries that have ratified the changes: Thailand, Singapore, Laos and Myanmar.
This dovetails with Prime Minister Shinzo Abe’s call for Japanese firms to divest supply chains and reduce manufacturing dependence on China, after the coronavirus pandemic shuttered factories and cut production lines.
He urged firms not to put all their eggs in the Chinese basket, but to relocate back home and increase their presence in Asean, earmarking about 240 billion yen (S$3.1 billion) to help them do so.
Mofa pointed out that this will be the country’s first trade deal covering trade in services and the movement of service industry workers with Cambodia, Laos and Myanmar. “It is expected that the Protocol will promote further trade and investment between Japan and the fast-developing Asean (region), and strengthen the Japan-Asean cooperative relationship,” it added.
The revised deal, which was signed last year, will apply to the other six Asean nations in the second month after they complete their domestic procedures.
Japan exported 12.6 trillion yen worth of goods to Asean in 2018, while imports from the bloc stood at 12.4 trillion yen, Finance Ministry data shows.
Japan is separately negotiating the multilateral Regional Comprehensive Economic Partnership (RCEP) deal with Asean, as well as Australia, China, South Korea and New Zealand.
While the group had aimed to sign the pact this year, Japanese government sources have said it might be politically difficult to complete talks for what would be the world’s biggest free trade deal within the year, given that economies are suffering from the pandemic fallout.