TOKYO, Nov. 1 ― The Trans-Pacific Partnership (TPP) without the United States, also known as TPP-11, will come into force on Dec. 30 this year as Australia has become the sixth country to ratify the agreement, joining Japan, Canada, Mexico, New Zealand and Singapore.
The entry into force “will send a strong message that the new trade rules of the 21th century, which area freer and fair, will be established and will spread to the world,” Japan’s Economy Minister Toshimitsu Motegi said at an Oct. 31 press conference.
Australia’s ratification came within a day of the November 1 deadline. It was crucial because the TPP-11 agreement takes effect 60 days after six countries ratify the deal, and it cuts tariffs at the start of each fiscal year for Japan.
That means a first round of tariff reductions is triggered initially on Dec. 30, 2018 and secondly on April 1, 2019.
The TPP-11 is one of the most comprehensive trade agreements that will open Japan’s recent history.
For instance, Japan imposes a 38.5 percent of tariff on beef imports. In the first year of the agreement, the tariff would drop to 27.5 percent and eventually sink to only nine percent.
The same thing goes with another sensitive product: pork.
Japan uses a “gate price” system for importing pork. That provides an incentive to import higher-value pork and taxes lower-value pork, thus protecting the domestic industry from import competition.
Although the gate price system for pork is not eliminated under the TPP-11, the ad valorem duty will be removed and the maximum price for product entering below the gate price will be phased down from the current 482 yen per kilogram to 50 yen per kilogram over 10 years.
Once the trade agreement takes effect, a TPP committee that consists of the first group of six members will hold a ministerial meeting in Japan in January to discuss the procedures of accession for new members.
So far, South Korea, Thailand as well as Colombia and the United Kingdom have shown “strong interest” in joining the TPP-11.