[ Nippon Keidanren ] [ Policy ]

Building Stronger Japan-Canada Economic Partnership

-- Recommendations for the Joint Study and Beyond --

[ summary ]

I General Remarks

For Japan, Canada's trade and investment markets are small, compared with its trade with the United States, China, ASEAN, and the EU. Even so, Canada is an advanced country with stable political and economic systems, and it boasts a highly qualified workforce and high-quality technology. Its underground natural resources are the third largest in the world. These facts show the significance of the Canadian economy and underscore the Japanese business community's conviction that it is essential for both countries to maintain their stable, mutually beneficial economic partnership, and to continue their efforts to expand trade and investment.

In order to rapidly enhance bilateral economic partnership quickly, Nippon Keidanren believes that, to improve the business environment, priority should be given to:

Regarding the promotion of trade in goods, the advantages and disadvantages of Japan and Canada signing a Free Trade Agreement should be further examined and discussed in the future, in consideration of following points.

First, we should consider sensitive products for Japan such as agricultural, forestry and marine products. Secondly, tariff elimination or reduction should be considered with an eye to progress in WTO Doha Development Agenda negotiations. Thirdly, the Japanese business community must keep in mind the progress of ongoing negotiations between Canada and other countries as they pursue FTAs or EPAs.

We urge that after the Joint Study is concluded, priority be given to an investment agreement that includes the liberalization of trade in services, dialogue on regulatory reform, and the promotion of cooperative issues. We also strongly recommend that the government and private sector continue to discuss the establishment of an FTA or EPA. These efforts could include, for example, negotiations on an agreement to improve the climate for trade and investment. Such an agreement should contain:

A change in the status quo, such as Canada signing a new FTA with South Korea or some other country, would make the exports of the FTA partner far more cost competitive than Japanese exports. In the meetings on a regular basis to discuss trade and investment liberalization and the advantages and disadvantages of an FTA or EPA, if it is decided that it is urgent need to remedy such negative impact on Japan's competitiveness in the Canadian market and that an FTA or EPA would be, on the whole, greatly advantageous for both Japan and Canada, the two sides should begin consultations on the FTA or EPA.

II Detailed Explanations

1. Tariffs which impede business operations (Examples)

Automobiles and trucks: 6.1%
Wheels for railway rolling stock: 9.5%
Photographic films for exposure in cinematographic: 6.5%
Electrical insulators of ceramics: 3.0%
Spruce-pine-fir (SPF) products (mainly two-by-fours): 4.8%
Oriented strand board (OSB): 6.0%
Beef: 38.5%

2. The ways to promote domestic regulatory reform

(1) A framework to promote regulatory reform and liberalize investment and trade in services

(2) Regulatory reform to improve Canada's business environment

3. Areas of cooperation of special interest to the Japanese business community (Examples)

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