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Japan, Chile Sign Free Trade Deal

Tariffs on 90% of trade will be eliminated.

Japan on March 27 signed a free trade deal with Chile, its first such pact with a South American nation that will eliminate tariffs on more than 90% of trade. Japan quickly sealed the deal with Chile, which had already signed a free trade agreement with China in 2005.

Chile is Japan's biggest provider of coal and provides Asia's largest economy with a quarter of its salmon.

The pact with Chile will eliminate tariffs on some 92% of trade but will not extend to sensitive farm produce such as rice, which Japan strongly protects. Under the deal, Santiago will immediately lift its 6% tariff on Japanese cars and also lift duties on machinery, electronic equipment and products such as Japanese green tea and sake rice liquor. Tokyo in turn will gradually eliminate its 3% tariff on Chilean copper, its 3.5% tariff on Chilean salmon and its 17.6% tax on Chilean wine.

Japan, the world's second largest economy and a major exporter, has been seeking a growing number of free trade deals as global liberalization talks languish. Since signing its first agreement with Singapore in 2002, Japan has sealed deals or their framework with Brunei, Indonesia, Mexico, Malaysia, the Philippines and Thailand. It is also in negotiations with India, South Korea and Gulf states and next month will open talks with Australia.

Copyright Agence France-Presse, 2007

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