The historic Trans-Pacific Partnership has long been a key plank of Japanese Prime Minister Shinzo Abe's strategy to reignite the stagnant Japanese economy, widen the country's regional influence and add impetus for badly needed reforms of agriculture and other sectors largely insulated from the chill winds of competition.
Any effect this might have on blunting non-member China's growing clout by setting new ground rules and removing barriers to a large swath of trade and investment is also part of the equation for a government that is expending considerable energy on security issues in East and Southeast Asia.
But even if the deal gets through a divided U.S. Congress and past Japanese parliamentarians still beholden to protectionist farm and other influential lobbies – and if it survives the Canadian election – it's no panacea for what ails the Japanese economy.
Nor does it signal the kind of major reforms Japan needs to tackle its deepening problems as its rapidly aging and spending-averse population, shrinking work force and stultifying business regulations.
Mr. Abe called the agreement reached early Monday "a far-sighted policy for all participating countries that share the values and try to build a free and fair economic zone."
It's a bit of brighter news in an otherwise dismal time on the economic front for him and his government.
His troubled reform agenda, Abenomics, so far gets failing grades. Despite record injections of fiscal and monetary stimulus, the economy is struggling to stay on the road to recovery. Indeed, after some fitful progress, it seems to be back in reverse gear.
The economy shrank in the second quarter at an annual clip of 1.6 per cent, a grim result largely attributed to weaker consumer spending and a drop in exports stemming partly from a slowing Chinese economy. The same factors were almost certainly at work in the third quarter. And news of the biggest trade deal in a generation is unlikely to trigger a surge of patriotic spending.
Economy Minister Akira Amari, who spearheaded Japan's efforts to reach the wide-ranging TPP deal, has cited rising food costs as a possible factor in dampening consumption.
Yet in five years of TPP negotiations, Japanese officials made it clear they had no interest in exposing their agriculture sector to cheaper foreign competition in such key areas as rice, pork, beef, dairy products, soybeans and wheat. And unlike Canada, whose meat and grain producers are eager to boost exports, Japan faces no such pressure from its largely uncompetitive, small-scale farmers, whose sole interest has been safeguarding their heavily protected domestic market at the expense of consumers.
Mr. Amari told me two years ago that Japan would never accept the complete removal of agricultural tariffs and that a reduction of many of the barriers would require approval by local governments as well as Tokyo.
In the end, Japan made small but politically dicey concessions, capping tariffs on pork at a relatively tolerable level and allowing the United States, for example, to ship an additional 50,000 tons of rice duty-free annually. This would rise gradually to 70,000 over 13 years. Under an existing multilateral trade agreement, Japan allows 770,000 tons of rice duty-free, of which the United States accounts for nearly half. The normal tariff is 778 per cent.
Even assuming the TPP enjoys clear sailing past the myriad political obstacles in various countries – something rarely seen for any sweeping trade deal – that's hardly enough to persuade Japanese producers to become more efficient and take a crack at other big export markets themselves.
By the time the TPP is fully implemented several years down the road, Mr. Abe and his government are likely to be long gone. But unless it goes after the structural impediments weighing down the economy in the meantime, the trade deal is unlikely to move the needle into more positive territory.