Countries agree on joint study on the subject
OTTAWA: Canada is taking the first step toward negotiating a free trade deal with Japan.
Trade Minister Peter Van Loan announced February 23 the two countries have agreed to a joint study on the feasibility of establishing an economic partnership.
“It’s a very major development, in that Japan has traditionally been very closed to the idea of free trade agreements,” he said. “We are (already) a good trading partner, a very compatible economy—we are the source of many of the inputs into the Japanese economy.”
Van Loan said the breakthrough occurred last fall when Japan adopted a new policy more amenable to trade agreements, creating an opening for Canada. Last year, Canada’s exports to Japan totalled about $9.2 billion.
Van Loan said it was too early to say what mutual benefits would be derived from a formal deal, but listed agriculture, natural resources and manufacturing products as three sectors that could gain from reduced barriers. He also noted that Japan is a major investor in the Canadian economy in the auto sector, manufacturing vehicles, many of which are exported into the US.
Toyota Canada welcomed the joint study, saying free trace benefits consumers and business by ensuring open and competitive markets. As well, the Japan Automobile Manufacturers Association (JAMA) of Canada was also enthusiastic about the news. Investments by the Japanese auto industry in Canada have grown significantly in the past two decades, the organization noted.
“This announcement on the joint study is a very welcome development for our members in Canada, particularly as the Canadian government is in the midst of free trade negotiations with both South Korea and the European Union,” said David Worts, executive director of JAMA Canada.