Japan and Canada agreed to start negotiations on a free-trade agreement, the leaders of the two countries said.
Japanese Prime Minister Yoshihiko Noda and Canadian Prime Minister Stephen Harper made the announcement after meeting today in Tokyo.
“A free-trade agreement 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,” Harper said in a statement.
Harper is in Tokyo as part of a six-day trip to Asia to build trade and investment ties. The prime minister said on Friday his government would study the economic benefits of a free-trade pact with Thailand.
Japan and Canada last year had C$23.7 billion ($23.7 billion) in combined merchandise trade, according to Canadian government figures. Japan exported goods valued at C$13 billion to Canada, which exported C$10.7 billion the other way.
Canada was Japan’s 18th largest trading partner in 2010, while Japan was Canada’s fifth biggest partner, according to a joint study by the two countries released this month.
A free-trade agreement would increase Japan’s gross domestic product by between 0.08 percent and 0.09 percent, while augmenting Canada’s GDP by between 0.24 percent and 0.57 percent, the study found.
Canada will seek the elimination of Japanese tariffs in a number of sectors, including agriculture, fish and seafood, forestry and industrial goods, according to a statement distributed by the prime minister’s office.
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