• Kyodo

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The top leaders of Japan and Mongolia agreed Thursday to boost economic ties by taking full advantage of a new bilateral trade deal.

Prime Minister Shinzo Abe and Mongolian President Tsakhiagiin Elbegdorj held talks on the eve of a biennial summit of Asian and European leaders.

“As we are precious partners in this region that share basic values, the importance of our relations remains unchanged,” Abe told reporters after the meeting in the Mongolian capital of Ulan Bator.

There was a change in government in Mongolia following a parliamentary election late last month.

Abe said that despite the change Japan will “closely cooperate with the new Mongolian government and try to further strengthen ties.”

In addition to Elbegdorj, who is chairing the Asia-Europe Meeting summit, Abe separately met with new Mongolian Prime Minister Jargaltulga Erdenebat.

A free trade agreement between Japan and Mongolia, which sits on some of the world’s richest mineral deposits, took effect last month. Under the deal, Japan will scrap tariffs on all imports from Mongolia, with Mongolia to cut tariffs on 96 percent of Japanese imports within 10 years.

It is the first bilateral FTA for Mongolia.

The two countries hope that the new economic accord will boost bilateral relations already strong in the areas of political and people-to-people exchanges.

As the volume of trade between Japan and Mongolia is still relatively small, the immediate impact is expected to be limited.

Still, the Japanese government sees Mongolia, landlocked between China and Russia, as becoming more strategically important, not only economically but also in geopolitical terms.

Mongolia, which shares the longest land border with China of any country, has transitioned into a market economy since the 1990s after the fall of the Soviet Union.

Erdenebat was elected to the new post last week after his Mongolian People’s Party returned to power in a sweeping electoral victory, amid a prolonged economic downturn after its gross domestic product growth peaked at 17.5 percent in 2011.

Mongolia, with a population of around 3 million, has been hit hard by a sharp fall in global commodity prices and a sharp decline in inflows of foreign direct investment.

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