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Free trade deal with Colombia designed to help Japanese carmakers

Asahi Shimbun | September 27, 2012

Free trade deal with Colombia designed to help Japanese carmakers


Japan is set to begin talks with Colombia on an economic partnership agreement in the hope that it will spur vehicle exports to the third-largest market in Latin America.

Officials are keen to get started because Japanese automakers will be put at a disadvantage when Colombia lowers tariffs on South Korean vehicles under a free trade agreement concluded in June.

Prime Minister Yoshihiko Noda and Colombian President Juan Manuel Santos agreed to begin negotiations in New York on Sept. 25.

Japanese officials said they hope to wind things up by the end of 2013.

Colombia, with a population of 46 million, imposes tariffs on almost all Japanese exports. It slaps a 35-percent tariff on vehicles and 5-10 percent tariffs on automotive components.

Japanese officials said they hope automobile tariffs will eventually be lowered to zero.

Most Colombian products bound for Japan are tariff-free. Coffee and other agricultural products account for 80 percent of the country’s exports to Japan.

Japan has economic partnership agreements with 13 countries and regions. Negotiations are under way for five more, excluding the one with Columbia.

Japan also hopes to negotiate free trade agreements with China and South Korea, and join a Trans-Pacific Partnership agreement, which is designed to remove all tariffs in principle.

Rice and other politically sensitive farm products will be among key hurdles for those agreements. Japan is allowed to exclude many agricultural products from its existing agreements.

 source: Asahi Shimbun