OTTAWA . Prime Minister Stephen Harper is expected to announce the launch of free trade negotiations with Japan, as well as an easing of the ban on Canadian beef exports, when he heads to Asia for a security summit next month.
Mr. Harper is heading to Seoul, South Korea, at the end of March for the Nuclear Security Summit, but it is understood he will stop in Tokyo to meet Japanese Prime Minister Yoshihiko Noda and announce the start of negotiations on an economic partnership agreement with Japan, which is already Canada's fourth-biggest trading partner.
The two men are also likely to announce that the ban on Canadian beef for animals older than 21 months will be eased to allow cattle aged 30 months and younger to enter Japan. The ban was initially imposed over fears about mad-cow disease.
A spokesman for the Prime Minister's Office would not comment on the prospect of Mr. Harper visiting Tokyo but acknowledged that the government is targeting the Asia Pacific region as part of its Global Commerce Strategy.
Both countries are trying to enter the Trans-Pacific Partnership, the trade club of nine Pacific nations. Negotiations are ongoing among member countries - the U.S., Australia, Chile, Malaysia, Brunei, New Zealand, Peru, Singapore and Vietnam. However, New Zealand in particular has protested against Canada's entry unless it removes tariffs that protect its supply managed chicken and dairy industries.
Peter Clark, president of international trade consultants Grey, Clark, Shih & Associates, said a bilateral deal with Japan would be more beneficial and quicker to conclude than entering the TPP talks.
"They [the Japanese] like us and we don't have too many problems with them.- The Americans are going to make us pay through the nose to get into the TPP, but the real advantage to us is access to Japan and Vietnam, so we're better doing bilaterals," he said. He estimated a deal could be concluded within a year, well ahead of the U.S and European Union, both of which are seeking similar agreements.
One driving force behind a bilateral deal is so that each country would be in a position to support the other's entry into the TPP, without giving
TRADE WITH JAPAN
Canada is set to begin free trade talks aimed at improving access to Japan's $5.8-trillion economy. A summary of our current trading relationship:
Exports
- Fourth-largest export destination, behind U.S., U.K. and China.
- $8.3-billion in goods exported in 2009, equal to combined GDP of all three Northern territories.
- Top Japanese exports (in order): Mineral fuels and oils, oil seeds, meat, wood products and mineral ore.
Imports
- Fourth-largest import source, behind U.S., China and Mexico.
- $12.4-billion imported in 2009, equal to more than twice the GDP of P.E.I.
- Top Japanese imports (in order): Motor vehicles, machinery, electrical and electronic equipment, scientific/precision instruments and rubber.
- Combined Japanese direct investment holdings in Canada were pegged at $13.1B in 2009.
Source: Department of Foreign Affairs and International Trade up ground on supply management or rice.
The benefits for Canadian companies would come in the form of reduced tariffs - the general rate on imports of nickel and aluminium, for example, is more than 10%. But an agreement would also likely address non-tariff barriers by harmonizing some standards and technical requirements.
Canada and Japan have a trading relationship that is already worth more than $20-billion and trade experts suggest there is huge potential to grow that number. Exports totalled $9.2-billion in 2010, an increase of 10% on the previous year. Japan shipped exports worth $13.4-billion to Canada in the same year. The Japanese are keen to secure a supply of Canada's natural resources, particularly forest products and uranium, while both sides see the potential to co-operate on value added manufacturing for industries like aerospace.
The two countries recently concluded a feasibility study that revealed there are few irritants that would act as obstacles to a deal. Both sides have concerns about protected agricultural sectors - chicken and dairy for Canada; rice for Japan - but since the Japanese don'texport those products and Canada does not supply Japan with rice, it is a non-issue.
Mr. Clark said the opening of trade talks with Japan will likely encourage the South Koreans to return to the negotiating table with Canada. Talks on a free trade deal with Seoul have been stalled for four years.
Free trade deals with both Japan and South Korea could see more cars from Asia being imported into Canada, if the 6.1% duty imposed on vehicles imported from outside North America is removed. Any such move is likely to face strong resistance from the auto unions, who have warned it would increase trade imbalances and result in job losses.
Like Canada, Japan is keen to kick-start its faltering economy by striking new trade deals. It is negotiating a potential three way pact with China and South Korea, as well as a separate agreement with Australia and the TPP.
Original Article
Source: national post
Author: John Ivison
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