Mongolia and Japan Sign Free Trade Agreement

July 22, 2014 Share Print 0

Japan and Mongolia will announce a free trade agreement between the two countries when their leaders meet later on Tuesday, Mongolian President Tsakhiagiin Elbegdorj said.

“We are in the stage of concluding” the trade liberalization deal, Elbegdorj said in a speech at a business forum in Tokyo in the morning.

Elbegdorj said that he and Prime Minister Shinzo Abe “will announce (the countries) reached a broad agreement,” expressing his hope that the accord will help accelerate trade and investment between the two Asian economies.

In their negotiations, which began in 2012, Japan has called on Mongolia to eliminate a 5 percent tariff on Japanese car imports, while Ulan Bator has asked Tokyo to remove or significantly reduce its 38.5 percent tariff on Mongolian beef.

The size of bilateral trade is relatively small, but Abe apparently aims to leverage closer economic ties to boost their political relations as Japan has partly relied on Mongolian assistance in negotiating with North Korea.

Mongolia has diplomatic ties with North Korea and has provided venues for contact between Japanese and North Korean officials to discuss North Korea’s abductions of Japanese in the 1970s and 1980s, an issue that has prevented the two countries from normalizing bilateral relations.

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.