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Politics New round of Canada-Japan trade talks coming in April

Access to the Japanese market can be difficult, since a complex web of non-tariff barriers pose serious hurdles for foreign companies trying to compete there.

YURIKO NAKAO/REUTERS

Canada and Japan are meeting for a second round of free-trade talks this month as Ottawa tries to stay ahead of other countries looking to cut similar deals with Tokyo.

Japanese negotiators will visit Canada from April 22 to April 26 to continue talks on a Canada-Japan economic partnership agreement.

Trade Minister Ed Fast is currently leading a trade mission to Japan, his third visit there since being named to his post.

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Last November, Canada and Japan began what are expected to be difficult free trade negotiations aimed at unlocking access to an Asian economy beset by import restrictions.

It's the fourth set of major free-trade talks the Harper government has loaded onto its plate – all of which have yet to bear fruit. These include trade talks with the European Union, India and the Trans-Pacific Trade Partnership.

Other big potential free trade partners for Japan are breathing down Canada's neck right now.

In late March, Japan, China and South Korea embarked upon the first round of talks to form a tripartite free-trade agreement. And Japan and the 27-country European Union have agreed to launch talks this month to set up an economic partnership agreement.

Both of these negotiations carry a risk for Canada: that Tokyo will first focus its energies and efforts on cutting deals with larger markets, leaving Ottawa as a second-tier priority.

The Canadian government, however, believes this country's rich energy resources are a trump card that will keep Japan focused on talks with Canada.

Japan is debating whether to move away from heavy dependence on nuclear energy after the 2011 Fukushima Daiichi reactor meltdown.

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A top Japanese government advisor said earlier this month that the Asian country is prepared to invest billions of dollars in natural gas pipelines and terminals in Canada.

As part of trade talks, Canada and Japan are expected to ink a foreign investor protection agreement that would give Japanese and Canadian investors more legal protection for their investments in each other's markets.

The foreign investment protection deal would create an even more stable investment environment for Japan in Canada.

Japan is the world's third-largest economy and Canada's fourth-largest foreign market for goods export. Japan is also one of the largest foreign direct investors in Canada.

The Asian country has yet to sign an FTA with a Group of Eight member country.

Access to Japan's market can be difficult: A complex web of non-tariff barriers pose serious hurdles for foreign companies trying to compete there. These can include regulations that appear designed to frustrate foreign manufacturers.

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Canada, for its part, maintains a 6.1-per-cent tariff on Japanese autos and parts.

A recent study by the two governments said growth in Canada's economy would increase between a quarter- and a half-percentage point if a trade deal is concluded. It also predicted that a deal could lead to gains for Canadian exporters of farm products as well as aerospace and energy.

In 2012, total Canadian exports to Japan reached nearly $10.4-billion. Canada's single biggest export is metallurgical coal, used in steel making. With nearly $12.8-billion invested in Canada in 2011, Japan is Canada's largest Asian source of job-creating investment.

Canada is currently engaged in 19 sets of free trade negotiations that in total cover 74 countries, the single-biggest being talks with the 27-member EU.

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