Canada To Negotiate FTAs With Thailand, Japan

During the visit of Stephen Harper, the Canadian Prime Minister, to South-east Asia, he has announced, together with Yingluck Shinawatra, the Prime Minister of Thailand, and Yoshihiko Noda, the Prime Minister of Japan, that Canada will pursue bilateral free trade agreements (FTAs) with both countries.

Thailand is already Canada’s largest bilateral merchandise trading partner within the 10-member Association of Southeast Asian Nations (ASEAN). In 2011, the year that marked 50 years of diplomatic relations between the two countries, their total bilateral merchandise trade totaled nearly USD3.5bn, an increase of 14.8% over 2010.

It was said that the exploratory talks will examine the potential economic benefits of an FTA, and how such an agreement could further enhance the existing relationship between the two countries. However, there was no indication of when actual FTA negotiations would begin.

Both Prime Ministers believe that expanding trade will help our countries to create more jobs. “Thailand has a rapidly industrializing economy with 65m consumers,” said Harper. “Canadian businesses are already flourishing here, particularly in information technology, agriculture and clean technology. And Canada is rapidly becoming an investment destination of choice for Thai businesses.”

Yingluck added that Thailand wants to increase its exports to Canada, particularly with regard to seafood and agricultural products, rubber and rubber products, and electronics parts. Thailand is also looking for Canadian business to invest in electronics, machinery, automobile production and information technology.

Proceeding from Thailand to Japan, Harper was then able, together with Noda, to announce the launch of negotiations towards an FTA to deepen the trade and investment ties between Canada and Japan.

Harper commented that “an FTA with Japan - a powerful G-8 economy and respected Asia-Pacific partner - would strengthen the Canadian economy by generating billions of additional dollars in commercial flows between our two countries.”

The decision to begin FTA negotiations resulted from a recently-released Canada-Japan Joint Study which estimated that such an agreement could mean additional annual growth of around USD3.8bn a year and USD4.4bn in Canadian and Japanese gross domestic product, respectively, as the economies are largely complementary.

Japan would look to purchase a greater amount of natural resources from Canada, while exporting more automobiles and other industrial products through a reduction in Canadian import tariffs. However, while FTA talks with Canada would represent a good result for Japan, in that they would be would the first with a fellow G-8 economy, achieving a final result may be difficult given the antipathy of Japanese farmers to opening up their domestic market.

Source: Tax News