A revised 11-member Trans-Pacific Partnership trade pact entered into force without the United States on Sunday, creating a free trade area covering more than a tenth of the global economy.
The deal, signed in March after the U.S. withdrawal, will cut tariffs on agriculture and industrial products, ease investment restrictions and enhance protection of intellectual property.
The 11 countries hope that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will serve as a counter to growing protectionism as China and the United States engage in a trade war.
Australia, Canada, Japan, Mexico, New Zealand and Singapore became the first six members to ratify the pact, setting the stage for its entry into force. The agreement will become effective in Vietnam in January.
The CPTPP accounts for 13 percent of the world's gross domestic product and provides access to an economic bloc of 500 million people. The participating nations will scrap tariffs on most products.
Japan, for its part, will eliminate import duties on 95 percent of items, with some key sectors such as rice and beef continuing to receive a certain level of protection.
Still, Japanese consumers will be able to buy imported beef and other food items at much cheaper prices while manufacturers can boost exports with the elimination of tariffs.
Automakers, for example, will see Canada, a major North American market, reducing its 6.1 percent tariff on imported passenger cars to zero in 2022.
The CPTPP is likely to lift the trade-reliant Japanese economy, currently in its second-longest postwar expansion. The government estimates that the economy will get an 8 trillion yen ($72 billion) boost, equivalent to 1.5 percent of GDP in fiscal 2017.
Farmers in Japan, however, are concerned about an influx of cheaper agricultural produce.
The current 38.5 percent tariff on beef imports will be reduced in stages to 9 percent by 2033, a potential boost to meat exporters such as Australia. With the elimination of 6.4 percent import duties, kiwifruit from New Zealand is set to become cheaper.
With a maximum 150 billion yen negative impact estimated, the Japanese government has allocated funds to make the agriculture sector more competitive with another free trade agreement with the European Union due to take effect on Feb. 1.
Prime Minister Shinzo Abe has placed free trade as a driver of economic growth and pursued multilateral frameworks while U.S. President Donald Trump favors bilateral deals to push his "America First" agenda.
TPP negotiations began in 2010 and the current members plus the United States signed an agreement in 2016. But the United States withdrew from the deal in January 2017 under the Trump administration.
The remaining countries, also including Brunei, Chile, Malaysia and Peru, prevented the TPP from collapsing and signed the CPTPP, a revised version, after suspending some provisions in the original agreement.
The expansion of membership is the next challenge for the CPTPP.
Britain, Colombia, Indonesia, South Korea and Thailand have shown interest in joining the pact and the first meeting of a committee to discuss procedures to accept new members will take place on Jan. 19 in Tokyo.