Mongolia and Japan Sign Free Trade Agreement

Japan and Mongolia will announce a free trade agreement between the two countries when their leaders meet later on Tuesday, Mongolian President Tsakhiagiin Elbegdorj said.

"We are in the stage of concluding" the trade liberalization deal, Elbegdorj said in a speech at a business forum in Tokyo in the morning.

Elbegdorj said that he and Prime Minister Shinzo Abe "will announce (the countries) reached a broad agreement," expressing his hope that the accord will help accelerate trade and investment between the two Asian economies.

In their negotiations, which began in 2012, Japan has called on Mongolia to eliminate a 5 percent tariff on Japanese car imports, while Ulan Bator has asked Tokyo to remove or significantly reduce its 38.5 percent tariff on Mongolian beef.

The size of bilateral trade is relatively small, but Abe apparently aims to leverage closer economic ties to boost their political relations as Japan has partly relied on Mongolian assistance in negotiating with North Korea.

Mongolia has diplomatic ties with North Korea and has provided venues for contact between Japanese and North Korean officials to discuss North Korea's abductions of Japanese in the 1970s and 1980s, an issue that has prevented the two countries from normalizing bilateral relations.