Japan and Mongolia are likely to reach a broad agreement to conclude a treaty aimed at allowing the two nations to export defense equipment to one another, Japanese government officials said Tuesday.
Prime Minister Fumio Kishida and Mongolian President Ukhnaa Khurelsukh are expected to discuss the matter when they meet in the Mongolian capital of Ulaanbaatar in mid-August.
Tokyo hopes that Japan and Mongolia will sign the treaty, which will guarantee the proper management of defense equipment and technology by transfer destinations, as early as this autumn.
Japan expects the treaty to strengthen security cooperation with Mongolia, which borders China and Russia.
Japan is also considering making Mongolia eligible for receiving Japanese defense equipment free of charge in fiscal 2024.
In their summit, the Japanese and Mongolian leaders are also expected to confirm cooperation in helping Mongolia attract more investments, in areas including business law, stock market oversight and administrative transparency.
Mongolia has been hoping for more investment from Japan since a bilateral economic partnership agreement came into effect in 2016.
There are, however, risks for Japanese companies boosting investment in Mongolia, such as differences between the legal systems.
Mongolia needs to "strengthen governance to ensure free and fair trade," a Japanese government official said.