Japan and Mongolia have signed a bilateral economic partnership agreement that will expand trade and enhance the strategic partnership between the two countries.

The agreement was signed by Prime Minister Shinzo Abe and his visiting counterpart Chimed Saikhanbileg at the prime minister’s office in Tokyo on Tuesday. Over the next decade, it is expected to remove tariffs on about 96 percent of the combined total value of trade between the two countries, which was valued at ¥41.8 billion in 2012.

It will be the 15th EPA for Japan once it takes effect following Diet approval, and the first for Mongolia, according to the Foreign Ministry.

Statistics for 2012 from the Mongolian government show that 66.4 percent of Japan’s export value to Mongolia — ¥39.9 billion — was made up of automobiles and their components, followed by machinery at 18.5 percent and chemical engineering products at 5.1 percent.

Meanwhile, 53 percent of Mongolia’s export value to Japan, which totaled ¥1.9 billion in 2012, was made up of coal, followed by mineral products representing 25 percent and clothing at 15.4 percent, according to the Finance Ministry.

At a joint news conference following their summit, Abe welcomed the signing of the trade pact, which took about three years to negotiate.

“I’m sure (the EPA) will become an important foundation for the two goals that we are pursuing simultaneously, which are to further deepen the bilateral relationship and to promote Mongolia’s economic development,” Abe said.

Saikhanbileg said the pact will not only help expand trade and people exchanges between the two countries, it will contribute to his country’s efforts to become more integrated in the regional economy.

“I strongly hope the EPA will foster further investment by Japan and help introduce knowhow from Japan,” he told reporters.

Abe pledged an additional ¥36.85 billion in loans to help the ongoing construction of an international airport in Ulan Bator, the Mongolian capital. He also said Japan will send experts to Mongolia to help draw up a medium- to long-term economic policy.

Saikhanbileg was set to wrap up his three-day visit to Japan on Wednesday. It was his first overseas trip since taking office in November.

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