April 2005

Alcantara Francisco
On September 17th 2004 Prime Minister Junichiro Koizumi and the President of Mexico Vicente Fox, signed a FTA between both countries that will enhance both trade and economical relations between Japan and Mexico.

This treaty, better known as the Economical Association Agreement, will be officially implemented in April 2005. This treaty will remove a tariff of 95% on Mexican products and 44% on Japanese products to Mexico.

The negotiations were resolved after two years of discussions. This is actually the 12th FTA agreement that Mexico has signed and the 2nd for Japan, the last one being signed with Singapore.

Once this FTA agreement is active, products like tequila will go down from a tariff of 15.24% to zero and grapes will do the same from the current tariff of 17%. Also, in seven years, grapefruit juice will decrease from 25% to zero as well.

This agreement will allow for an increase of trade and investments in the present unequal economical relations of both countries.

Currently, Mexico faces a gargantuan deficit in comparison to Japan. According to figures of the Ministry of Economy, Mexico exported in 2003 to Japan products for 605 Million USD while it imported from Japan 7,622 Million USD.

This agreement will benefit Japan mainly in its investments in Mexico and will therefore help them to gain an increase in opportunities to access NAFTA and other FTA agreements in South America.

Posted on April 2005 in the following categories: Events