| Summary/Abstract |
The Trans-Pacific Partnership (TPP) is a free trade agreement that hopes to eliminate all tariff and non-tariff trade barriers between 12 participating countries. Japan, the fourth-largest trading partner for the United States, is a significant player in the negotiations. Due to cultural and historical significance it is expected that Japan will ask for exclusions on agricultural products, limiting the overall effectiveness of a fully liberalised agreement. Using a computable general equilibrium modelling framework across varying scenarios, we show the difference between the full liberalisation and potential exclusionary scenarios. Estimates show that a 25 per cent reduction in import tariffs on agricultural commodities in Japan results in a difference of net welfare benefits equal to –USD 7 billion, emphasising the importance of these concessions.
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