Canada and Japan Economic Partnership
In 2012 Canada and Japan announced the launch of negotiations towards a comprehensive and high-level economic partnership agreement (EPA). The agreement known as the Canada-Japan Economic Partnership seeks to reduce and in some cases eliminated the non-tariff and tariff barriers that limits trade between the two nations.
Japan is a significant market for Canada’s agriculture and food sectors. It is the largest market for Canadian canola seed, the second largest market for Canadian malt and Canadian pork, the fourth largest market for Canadian beef, and an important high-value market for Canadian wheat and pulses.
Japan is heavily dependent on food imports, has the lowest rate of food self-sufficiency among G8 countries, and boasts a large agri-food trade deficit. Japan has a market of 127.5 million people and a GDP of $ 4.7 trillion. The country’s agriculture is constrained by low arable land (an estimate 0.03 hectares available for every person) and farm labour scarcity. Japan has a declining population growth and an aging labour force that places increasing pressure on the country’s resources. Even more concerning Japan’s food self-sufficiency has been on the decline since the 1970s.
The country is the third largest economy globally and in 2014 was Canada’s third biggest export market. In 2014 Japan imported $ 3.8 billion worth of agri-food exports from Canada.
The trade relationship between Canada and Japan has been complex and very positive for the most part. Currently Japan has in place, a number of policies that limits competition for Canadian agricultural and agri-food companies. Japanese producers particularly in the meat, rice and wheat sector, enjoy domestic protections in the forms of tariffs and non-tariff barriers.
CAFTA seeks expanded market access in Japan through the removal of import tariffs and non-tariff trade barriers.
CAFTA supports Canada’s participation in the EPA and believes it will significantly contributes to the growth and competitiveness of the agricultural sector.
CAFTA supports efforts to further expand economic ties with Japan and believes there is significant opportunity to expand trade further. Japan currently applies high tariffs on many agriculture and food products and imposes non-tariff barriers in a number of areas. Non-tariff barriers can present a significant impediment to the flow of goods and can add significantly to the cost of importing products to a country.