Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.
Japan, Canada Agree to Launch FTA TalksMonday, March 26, 2012 > 14:07:55
Hisane Masaki, Special Correspondent
The Journal of Commerce Online - News Story
Japan and Canada have formally agreed to launch negotiations on a bilateral free trade agreement (FTA) to eliminate import tariffs on most products and strengthen overall economic relations.
The agreement came when Japanese Prime Minister Yoshihiko Noda and his Canadian counterpart Stephen Harper met in Tokyo on Sunday.
Noda and Harper agreed to launch the bilateral FTA negotiations, “paving the way for substantial economic gains to both countries,” according to a joint statement on the outcome of their meeting issued by the Japanese and Canadian governments.
According to Japanese government figures, Japan exported 817 billion yen ($9.84 billion) worth of products to Canada and imported 958 billion yen ($11.54 billion) worth of goods from the North American country in 2010.
Japan’s main export items to Canada are autos and auto parts, general machinery and electronics goods, while its main import items from Canada are mineral fuels, agricultural products and forestry products.
In the FTA negotiations, Tokyo is expected to call for the abolition of Canadian import tariffs on Japanese autos, among other products, while Ottawa is expected to demand the elimination of Japanese import tariffs on Canadian farm products.
Through the trade pact with resource-rich Canada, Japan also wants to ensure stable supplies of resources, especially natural gas. Resource-poor Japan imports almost all of its natural gas as well as crude oil. It imports natural gas in the form of liquefied natural gas (LNG) and is by far the world’s largest LNG importer.
Demand for LNG is rising sharply in Japan as an alternative to atomic power in the wake of the nuclear crisis at Tokyo Electric Power Co.’s Fukushima No. 1 nuclear power plant.
In a bid to diversify LNG supply sources, the Japanese government has been in talks with the U.S. administration on importing the cleaner-burning fuel from the U.S. mainland, a top Japanese government spokesman confirmed recently.
But the U.S. restricts natural gas exports for energy security reasons. Export restrictions are particularly strict for countries that have not signed FTAs with the U.S. Like in the U.S., development of shale gas fields is progressing in Canada.
An FTA with Canada would be Japan’s first with one of the Group of Eight (G8) major countries — the U.S., Canada, Japan, Britain, Germany, France, Italy and Russia.
Japan has so far signed FTAs with 12 countries — Singapore, Mexico, Malaysia, Chile, Thailand, Indonesia, Brunei, the Philippines, Switzerland, Vietnam, India and Peru — and the 10-member Association of Southeast Asian Nations (ASEAN) as a whole. ASEAN's members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.