CORRECTED: LEAD: Japan-Mexico FTA takes effect, 2nd such pact for Japan

Asian Economic News, April 4, 2005

TOKYO, April 1 Kyodo

A free trade agreement between Japan and Mexico took effect Friday as Japan's second FTA, following one inked with Singapore in 2002.

The pact, Japan's first comprehensive FTA covering the politically sensitive agricultural sector, is the first for Mexico with an Asian country.

Mexico, which has signed FTAs with 42 other trade partners, aims to boost its farm exports to Japan, projecting that such exports will double to $1 billion in 2005.

With the pact in place, Japan and Mexico held the first meeting of a joint panel in Tokyo Friday to discuss how to operate the FTA.

Mexican Economy Secretary Fernando Canales Clariond, Japan's Economy, Trade and Industry Minister Shoichi Nakagawa and three other Japanese ministers took part in the meeting.

In a joint press statement issued after the meeting, the two sides said the trade pact ''will enable both countries to make the most of their economic complementarity and further promote the development of their respective economies.''

Canales said at a press conference that Mexico's exports to Japan will increase 20 percent in 2005 and will have an average annual rise of 10 percent in the long term.

''The FTA is a big chance for Mexico. The two countries' economies are complementary and I am sure bilateral relations will be further promoted,'' Canales said.

In 2004, Japan's imports from Mexico totaled 326.3 billion yen and exports to the country totaled 561.4 billion yen, according to METI.

Twenty chambers of commerce across Japan began issuing certificates of origin for exports to Mexico on Friday, so that the products can receive preferential tariff treatment under the FTA.

The pact was signed in Mexico on Sept. 17 last year by Japanese Prime Minister Junichiro Koizumi and Mexican President Vicente Fox.

Foreign Ministry Press Secretary Hatsuhisa Takashima said earlier this week that Japan expects to boost its trade with Mexico, United States, Canada and other countries with which Mexico has free trade pacts.

Japan has been holding talks to seal FTAs with Malaysia, the Philippines, South Korea and Thailand. Japan reached a basic FTA deal with the Philippines last November.

It will start formal FTA talks with the Association of Southeast Asian Nations on April 13-15.