Japan, Mongolia Ink Free Trade Deal

29/07/2014 12:00 - 750 Views

Following a meeting in Tokyo between the Japanese Prime Minister Shinzo Abe and Mongolia's President Tsakhiagiin Elbegdorj, it has been announced that their two countries have reached an agreement on the substance of a bilateral free trade agreement (FTA).

The FTA, negotiations on which began in 2012 and went through seven sessions, will entail both countries reducing their tariffs on selected goods.

Mongolia will remove its 5 percent import duty on Japanese second-hand cars over a period of 10 years, while Japan will eliminate its tariffs on the majority of Mongolian exports of industrial products over the same period. Japan will also reduce its duty on Mongolian processed beef and introduce a quota-based system.

According to official trade statistics, second-hand passenger vehicles are almost half of Japan's total exports to Mongolia, that totalled some USD290m last year. On the other hand, Mongolia's exports to Japan, which are intended to be boosted by the FTA, mainly consist of coal and other natural resources at present, and reached only just over USD20m in the same period.

Source: Tax News