Launch of Canada-Japan free trade agreement negotiations

Tokyo, Japan
25 March 2012

The Government of Canada is committed to creating jobs, growth and long-term prosperity for Canadians through expanding trade and economic opportunities abroad for Canadians and Canadian businesses. In keeping with this goal, on March 25, 2012, Canada announced the launch of negotiations towards a free trade agreement with Japan.

Canada and Japan already enjoy close economic relations, and further enhancing our trade and economic relationship is vital to the future prosperity of Canada.

On March 7, 2012, Canada released the Report of the Joint Study on the Possibility of a Canada-Japan Economic Partnership Agreement, which examined the potential of an economic partnership agreement, or free trade agreement. According to the findings, there remains much untapped potential in the Canada-Japan trade relationship, and a bilateral free trade agreement with Japan could increase Canada’s GDP by US$3.8 billion and boost exports to Japan by as much as 67 percent. The report concludes that an agreement would deliver substantial gains for both countries, including increased economic output, GDP growth and consumer welfare, along with strengthened bilateral trade opportunities for energy, other natural resources and food products.

The Joint Study also indicates that a comprehensive and ambitious free trade agreement between Canada and Japan should cover a wide range of areas, including trade in goods and services, investment, government procurement, trade facilitation and custom proceeds, electronic commerce, intellectual property and other areas as appropriate.

Canada will notably seek the elimination of Japan's tariffs across a broad range of sectors, including on agriculture, fish and seafood, forestry and industrial goods. Canada and Japan are also considering ways that an agreement should reflect their mutual commitment to environmental protection and labour practices.

Japan is an important market for Canada. In 2011, bilateral merchandise trade between Canada and Japan totalled $23.7 billion. Main exports to Japan were valued at $10.7 billion and consisted of mineral fuels and oils, oilseeds, mineral ores, wood and meat. Key sectors of interest to Canadian companies seeking to export to or operate in Japan include: agriculture, food and beverages; information and communications technology; aerospace and defence; environmental industries and cleantech, including energy; extraction, including forest-based building products and minerals; and life sciences. Imports for the same year from Japan were valued at $13 billion and consisted principally of motor vehicles and machinery.

Investment is also an important component of the Canada-Japan bilateral relationship and is an area with significant potential for further growth. Japan is Canada’s largest bilateral foreign direct investment partner in Asia. At the end of 2010, Japan was Canada’s sixth-largest source of foreign direct investment, with a stock valued at $16.0 billion, and Canadian direct investment in Japan had increased to $7.3 billion, up from $6.6 billion at the end of the previous year.

Japan is the world’s third-largest national economy with a GDP of $5.8 trillion.