Japan and Mongolia reached a basic accord on a free trade deal during a summit in Tokyo on Tuesday evening, Prime Minister Shinzo Abe said.
The trade pact features Ulan Bator abolishing its tariffs on most Japanese automobiles in 10 years.
The amount of trade between Japan and Mongolia is relatively small, but Tokyo could leverage closer economic ties to boost their political relations. Japan has often relied on Mongolian assistance in negotiating with North Korea over the abduction issue.
During his summit Tuesday with President Tsakhia Elbegdorj in Tokyo, Abe vowed to provide support for facilitating Mongolia's exports and sustainable economic development, as a complementary package of an economic initiative Tokyo announced at a summit last year.
In the FTA negotiations, which began in 2012, Japan called on Mongolia to eliminate a 5 percent tariff on Japanese car imports, while Ulan Bator asked Tokyo to remove or significantly reduce its 38.5 percent tariff on Mongolian beef.
Mongolia has diplomatic ties with North Korea and has provided venues for contact between Japanese and North Korean officials to discuss the abductions of Japanese in the 1970s and 1980s, an issue that has prevented the two countries from normalizing bilateral relations.
At Tuesday's summit, Abe was expected to ask Elbegdorj for further cooperation on the abduction issue. Tokyo and Pyongyang have recently resumed talks on the matter, and North Korea has launched a special committee to investigate the victims' fate.
In 2013, Japan's exports to Mongolia were valued at ¥29.3 billion and Mongolia's exports to Japan at ¥1.9 billion.
Japan's main export items to Mongolia include used passenger vehicles, which account for some 45 percent of the total. Tokyo has also called on Ulan Bator to ease restrictions on foreign investment to facilitate Japanese firms' businesses in such sectors as energy and infrastructure.
