Japan and Mexico sign bilateral free-trade agreement

Japan and Mexico sign bilateral free-trade agreement

Japan and Mexico on Friday signed a bilateral free-trade agreement (FTA), covering various sectors. It is stated that the free-trade agreement signed with Mexico is Japan's second FTA. The first one was signed with Singapore in 2002. The FTA signed between Japan and Mexico is expected to enhance trade relations between Japan and Latin America and the trade relations between Mexico and Asia. The FTA will eliminate Japan's trading disadvantage in Mexico against US and European exporters which enjoy better conditions in Mexican markets. Under the scope of the agreement, Mexico will remove tariffs on all types of steel products imported from Japan within ten years. Moreover, Mexico will create additional duty-free import quotas for Japanese automobiles, including passenger cars and small busses and trucks, apart from the existing duty-free import quotas. Besides, automobile imports from Japan will be tax-free by the seventh year. In return for these, Japan will reduce tariffs on orange juice by 50% in one year and create an import quota of 4'000 tons for the subject product. Moreover, the quota will be increased to 6'500 tons five years later. Tariffs on pork will also be decreased by 50%. On the other hand, the sole handicap of the agreement is the fact that Japanese farmers will have to compete with low-priced Mexican products. Japan will also commence negotiations with the Association of Southeast Asian Nations (ASEAN) countries for a FTA in April.