Japan and Chile Reach Economic Partnership Agreement

Japanese government recently reached a basic agreement on economic partnership with Chile government. Japanese export value to Chile is about 104 billion yen per year mainly for industrial products such as automobile, while the import value from Chile is about 565.4 billion yen per year mainly for mineral resource such as molybdenum or copper. Along the EPA 99.8% of Japanese export and 90.5% of Japanese import become duty free. Duty for ferro molybdenum, which is steel source material, would be eliminated as soon as the EPA becomes effective.Japan yearly exports about 7,000 tonnes of steel products to Chile. Tariff duties would be abolished as soon as the EPA becomes effective for 70% of the exports such as alloy steel sheet, steel pipe, hot and cold rolled steel sheet and surface treated steel sheet. Duties for the other 30% exports would be also eliminated within 10 years. Duties for some steel products become free within 5-12 years for such products as hot and cold rolled steel sheet which have much impact on Chile side. Steel products duty becomes totally free within 12 years.Duty for almost every industrial product is totally eliminated within 10 years to Chile from Japan. Duty for automobile, general machine and electric and electronic item is immediately abolished. The amount of ferro molybdenum deposit in Chile accounts for 21% of world deposit. Duty for molybdenum is abolished instantly from Chile to Japan. Japan procures 100% of domestic molybdenum consumption from overseas which was 27,000 tonnes in 2004. Japan can gain large merit by the EPA with Chile when Japan recently purchases more molybdenum from Chile than China.