Canada-Japan Economic Partnership Agreement (CJEPA)

Background

Canada is committed to pursuing new opportunities to deepen trade and economic cooperation with Japan. During Prime Minister Harper's March 2012 visit to Japan, he and then Prime Minister Noda announced the launch of comprehensive and high-level economic partnership agreement (EPA) negotiations, or free trade negotiations (see News Release: PM announces launch of free trade negotiations with Japan). This historic announcement followed the March 7, 2012, release of the "Report of the Joint Study on the Possibility of a Canada-Japan Economic Partnership Agreement".

Following the launch of Canada-Japan EPA negotiations, the Standing Committee on International Trade (CIIT) began its study of the EPA in April 2012. The CIIT held a number of hearings and meetings in Canada and Japan to obtain industry, academic, public and government stakeholder views on the initiative. On February 28, 2013, the CIIT tabled its Sixth Report, entitled Report on an Economic Partnership Agreement between Canada and Japan. The Report indicates strong support for the EPA negotiations and recommends, among other things, that the Government of Canada conclude as soon as possible an EPA with Japan that provides a net benefit to Canada.  The Government Response was tabled on June 13, 2013 and is available on the Committee’s website.

In addition to discussions about free trade, Canadian and Japanese senior officials meet for regular consultations in the context of the Joint Economic Committee (JEC). One of the basic documents that lays the groundwork for bilateral cooperation on economic and trade policy is the "Canada-Japan Economic Framework" signed in 2005.

Status of the negotiations

On March 25, 2012, Prime Minister Harper and then Prime Minister Noda announced the launch of comprehensive and high-level economic partnership agreement (EPA) negotiations, or free trade negotiations, in Tokyo, Japan (see News Release: PM announces launch of free trade negotiations with Japan).

The announcement followed the March 7, 2012, release of a Canada and Japan Joint Study examining the feasibility for a free trade agreement and outlining a broad range of issues which could be negotiated, including trade in goods, services, investment and trade facilitation (see Report of the Joint Study on the Possibility of a Canada-Japan Economic Partnership Agreement). The Joint Study examines each country’s approach to these various issues, and the areas of common ground. The study also summarizes the significant economic gains to be achieved through an EPA with Japan. The Study projects potential gross domestic product gains of approximately $4 billion each for Canada and Japan as a result of free trade. According to the study’s findings, there remains much untapped potential in the Canada-Japan trade relationship.

To date, Canada and Japan have held five rounds of negotiations, with Round 5 taking place the week of March 24, 2014, in Tokyo, and have made good progress in a broad range of areas.

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Japan: Canada’s Partner in Asia-Pacific

Canada-Japan relations are underpinned by political, economic and cultural ties which are bolstered by common values and mutual positive perceptions. Today, Canada and Japan are partners in numerous international groups and organizations including the G8, G20, APEC, the ASEAN Regional Forum, and the OECD. Both Canada and Japan are strongly committed to ensuring continued economic vitality, cooperative political relations, and development in the Asia-Pacific region.

Trade and economic relations between Canada and Japan have been steadily expanding. With a gross domestic product of $6.0 trillion (2012), Japan is the world's third largest national economy and one of Canada's most important economic and commercial partners.

Japan is by far Canada's largest bilateral foreign direct investment (FDI) partner in Asia. Japan's FDI in Canada totalled $12.8 billion in 2011, coming from approximately 330 Japanese subsidiaries and affiliate companies operating in Canada and employing tens of thousands of Canadians. Canadian investment in Japan is also significant and diverse with about 90 companies that have a permanent Japanese presence, primarily in the automotive, ICT, financial services, and forestry sectors. The stock of Canadian direct investment in Japan in 2011 increased to $8.4 billion.

Japan is Canada’s fourth-largest merchandise export market and our second-largest trading partner in Asia. Canada's merchandise exports to Japan totalled nearly $10.7 billion in 2013 while imports from Japan reached $13.7 billion (2013). Mineral fuels and oils (mainly coal) were Canada's primary merchandise export commodity shipped to Japan in 2012, while vehicles and vehicle parts, machinery, and electrical equipment & electronics were Canada's largest merchandise import commodities sourced from Japan.

Canada and Japan are engaged in trade negotiations through the bilateral EPA negotiations and our participation in the Trans-Pacific Partnership (TPP). Canada and Japan view working together in the TPP to enhance greater cooperation in the Asia-Pacific region, and working together bilaterally on our EPA, as mutually supportive efforts, with the CJEPA negotiations providing the opportunity to tailor outcomes to the needs of the bilateral relationship.

During Prime Minister Abe’s visit to Ottawa on September 23-25, 2013, Leaders publically reaffirmed their commitment to pursuing the CJEPA negotiations in parallel with the TPP.

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