Thursday, July 24, 2014

Japan, Mongolia reach broad agreement on free trade deal

Setting the stage for gaining cooperation from Mongolia over the abduction issue with North Korea through deepened economic ties, Japan has agreed in principle on a bilateral free trade deal.

“We will aim for an early signing and implementation of the pact,” Prime Minister Shinzo Abe told reporters July 22 after summit talks in Tokyo with visiting Mongolian President Tsakhiagiin Elbegdorj.

Mongolia has diplomatic relations with North Korea, whereas Japan does not.

Under the planned Economic Partnership Agreement, Mongolia will immediately eliminate its 5 percent tariff on cars that were manufactured within the last three years.

The tariff on used vehicles manufactured more than three to 10 years ago will be lowered gradually and removed 10 years after the pact's implementation. However, the tariff on cars manufactured over 10 years ago will remain the same.

Japanese exports to Mongolia in 2012 totaled 39.9 billion yen ($393 million). Automobiles, mainly used cars, accounted for 66 percent of the total.

In addition to strengthening trade, Japan hopes the pact will help Mongolia become familiar with its revised national security policy.

Abe said at the news conference that he “gained the understanding from the Mongolian president” of the July 1 Cabinet approval to allow Japan to exercise the right to collective self-defense.

By GO KOBAYASHI/ Staff Writer

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