(From AFP)

While Chinese government cautiously welcomed the agreement reached by the 12 nations negotiating the Trans-Pacific Partnership (TPP), Japanese Prime Minister Shinzo Abe said it would create the world’s largest free trade area to usher a “new century” for Asia.

Japanese PM  Abe
Japanese PM Shinzo Abe

Abe expressed hope China might one day join the historic accord.

“If China participates in this system in the future, that will contribute to both Japan’s security and the stability of the Asia-Pacific region,” he said.

A spokesman of the Chinese ministry of commerce said Beijing is “open to any mechanism” that follows World Trade Organization rules.

He hoped the deal will make a contribution to the development of trade and investment in the Asia-Pacific region.

However,  he did not indicate China would join the TPP.

China notably is not party to the negotiations and has embarked on plans to set up a rival agreement.

Xiang Songzuo, chief economist of the Agricultural Bank of China, said although TPP will not have a large impact on China’s competitive advantage in the near future, it will erode in the long run if the TPP takes more members, especially from European countries.

Hailing the deal in a televised news conference, Abe said: “A huge economic zone will emerge… the TPP will make our lives more prosperous.

“It’s the opening of a new century for the Asia-Pacific region,” he said, adding that the deal would “fundamentally strengthen rule of law in economic activities by establishing a free, fair and open international economic system.”

Spanning about two-fifths of the global economy, the hard-won agreement — which took five years to negotiate — aims to set the rules for 21st century trade and investment in the Pacific region.

Under the deal, 98% of tariffs will be eliminated on everything from beef, dairy, wine, sugar, rice, horticulture and seafood, through to manufactured products, resources and energy.

Abe has been a leading flag-waver for the TPP and in doing so has taken on the country’s entrenched agricultural lobby, usually staunch advocates of his Liberal Democratic Party.

“Melons made in Hokkaido, pears made in Oita and delicious rice will have a great opportunity” to access the global market, he said.

Abe also noted that Japan secured exclusion in the TPP’s tariff-free principles for some of its domestically sensitive products—such as the country’s staple food rice, sugar beet, beef, pork and in dairy.

“With strengthening in rules on intellectual property rights and measures to address piracy and counterfeit goods, Japan’s contents business will enjoy entering foreign markets with a sense of safety,” he added.

The accord must still be signed and ratified by the respective countries, including Japan.

Car manufacturers in the export-heavy economy are likely to benefit from the TPP.

“We welcome that tariffs on automobile parts will be removed immediately between Japan and the United States, and with Canada, relatively high tariffs on vehicles will be removed in a short period of time,” Fumihiko Ike, chairman of Honda as well as of the Japan Automobile Manufacturing Association, said in a statement.

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