MEXICO CITY, Mexico (Reuters) – Mexico and Japan signed a free trade agreement on Sept. 17 that will be a springboard for Japanese technology and equipment aimed at the U.S. market and give Mexican agriculture an important foothold in eastern Asia.
The agreement, which must be approved by each nation’s legislative bodies, is Japan’s second such deal, after a limited accord with Singapore.
Mexican president Vicente Fox and Japanese prime minister Junichiro Koizumi signed the deal at a ceremony in downtown Mexico City. It was expected to go into effect in April.
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“We’re talking about an accord that will serve as a mutual bridge to expand the economic activities of both countries,” Fox said.
The treaty opens the door in Mexico to imports of Japanese technology, electronics, heavy equipment and telecommunications equipment, much of which could then be exported to the United States.
The treaty will give Japan, the world’s second largest economy, greater access to the U.S., the world’s largest economic power.
Among the benefits is zero tariff access to each other’s markets for certain products.
Mexico exported $606 million US of goods to Japan in 2003 while Japanese exports to Mexico totalled $7.623 billion.
Mexico, a significant agricultural producer, wins immediate preferential access to Japan for at least 22 farm products, including unroasted coffee, wine, tobacco and eggs.
Mexico wants a bigger slice of the Japanese market for food products. The Asian nation consumes $60 billion worth of farm food products a year and needs to import about 60 percent of that amount.
After 14 rounds of negotiations, the treaty will give Mexico quota access to some of Japan’s most sensitive agricultural markets, granting it the right to export goods such as pork, beef and chicken.
Japan’s agreement with Mexico is the first to include agriculture, which is a contentious topic in Japan, where farmers wield considerable clout.
The deal will allow Mexico to export 80,000 tonnes of pork and 6,500 tonnes annually of orange juice to Japan under preferential tariffs.
The deal, nearly two years in the making, was expected to attract about $1.3 billion in Japanese investment annually over the next 10 years from about $350 million now.
