Japan, Chile sign free trade agreement
Houston Chronicle, USA
Japan, Chile Sign Free Trade Agreement
By Kozo Mizougchi, Associated Press Writer
27 March 2007
TOKYO - Japan signed a bilateral free trade agreement with Chile on Tuesday, the first such pact with a South American country for the world’s No. 2 economy.
Japanese Foreign Minister Taro Aso and his Chilean counterpart Alejandro Foxley signed an economic partnership agreement in Tokyo on Tuesday afternoon, according to the Foreign Ministry.
Chile will be the fifth country with which Japan has struck a free trade deal, and the first from South America, according to ministry official Yoshihiro Higuchi.
"What is most promising from the agreement is that not only companies but also consumers from both countries will have a great benefit," Aso said after the signing.
Aso said Japan and Chile will be expected to deepen bilateral ties in investment and services sectors as well as exchange of people and improved business environment more than before through the accord.
Foxley said Tuesday’s EPA agreement was the "starting point" of bilateral trade ties that must be deepened further.
"We must produce high-quality products" to the Japanese markets, Foxley said. He urged Japanese companies to make an aggressive investment in Chile while using there as a "gateway" to enter a huge South American market.
Japan exported 103.95 billion yen (US$880.93 million; euro 664.1 million)) worth of products, 63 percent of them automobiles, to Chile in 2005, the most recent year in which statistics are available, according to Japan’s Foreign Ministry. The amount was up 33.2 percent from 2004.
Meanwhile, Chile exported 565.36 billion yen (US$4.79 billion; euro3.61 billion) worth of products, 55 percent of them copper ore and molybdenum, to Japan last year, up 25.1 percent from 2004. Molybdenum, a very hard, lustrous, silver-white metallic element, is used in alloys, and added to steel to give it strength and resistance to corrosion.
Tariffs on 92 percent of a two-day trade amount will be abolished within 10 years after the agreement will be put into effect, expected be made by September. The agreement needs to be approved by parliament in Japan and Chile.
After the pact’s implementation, Chile will immediately abolish a 6-percent tariff on automobiles, general machinery, and electric and electronics products from Japan. Japan will gradually abolish a 3.5 percent tariff on salmon and trout from Chile over a ten-year period, while tariffs on bottled wine, currently at 17.6 percent, will be phased out over a 12-year period.
Under the accord, Japan will set tariff quotas for beef, pork and chicken, but eliminate tariffs on forestry products, excluding plywood, either immediately or gradually.
Japan already has free trade agreements with Singapore, Mexico, Malaysia and the Philippines. Chile has free trade agreements with more than 40 countries, including the United States and the European Union.
