How many Canadians know that Japan was the first country to land a rover on an asteroid in September and again last month?
When a Chinese spacecraft reached the dark side of the moon and NASA’s InSight landed on the red planet, they were covered live on national news networks. Meanwhile, Japan’s historic achievement was relegated to the ticker on the bottom of our TV screens.
You could be forgiven for not knowing because Japan always goes about its business with modesty.
Japan is the third largest economy in the world, top four export market for Canadian goods, our sixth biggest foreign investor, half of Canadian auto assembly jobs are with Japanese carmakers, and we enjoy close people-to-people relations. Despite that, Canadians generally pay little attention to our neighbour across the Pacific Ocean. But something tells me this about to change.
At a time when Japan is looking for partners beyond Asia and Canada is looking to diversify trade beyond North America, we share a natural synergy. When I visited Japan last month, it was clear that our bilateral ties sit on a precipice — especially since we recently unlocked free trade between our countries through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
On the one hand, Canada represents a great opportunity for Japan. We are uniquely placed as the only G7 country to have trade agreements with the rest of this group representing the world’s advanced economies. Japan is a net importer of energy, and until recently was the largest LNG importer in the world. Canada can help Japan diversify and secure its future energy supply.
In fact, Japanese companies are already laying the groundwork for future gas exports. Many Canadians will be surprised to know that Mitsubishi holds a 15 per cent stake in the $40 billion Canada LNG project, which is the largest single largest private sector investment in Canadian history. When the project comes online, Canada can become a major provider of energy to Japan.
Japan, on the other hand, is a vital entry point for Canada into fast-growing markets in Southeast Asia and other Asia Pacific countries. It is also a source for advanced technologies and investment critical for Canada’s economic future. According to reports, there is approximately $2 trillion of investment ready to leave Japan for the right opportunities around the world so we need to make sure that Canada is positioned front and centre.
CPTPP has created a unique but short window for Canadian businesses to take advantage of this opportunity before agreements are made with the United States or other competitors. And we must remember that a trade agreement is just a bridge that only leads to economic activity when businesses cross it. That’s why the first thing we should do is encourage Canadian business of all sizes and sectors to go to Japan, meet with potential partners, and explore opportunities.
One sector that has not wasted anytime is Canada’s agricultural industry. Beef exports from CPTPP members, including Canada, to Japan are already up 56 per cent from the previous year. Others that are well-positioned to benefit, if they move quickly, include the insurance and financial sector, energy and natural resources, fishing and seafood, retailers, as well as forestry that stands to benefit from the elimination of tariffs and restrictions on logs, lumber and processed wood.
Fortunately, turning our attention to Japan over the next year will not be too difficult. Whether it is the G20 in June, the Rugby World Cup in the fall or the Tokyo Summer Olympics in 2020, Japan will have the spotlight shine on them. It is my vision that Canadians will think more about Japan and we play an important part in what will be a significant moment for that country.
As nations managing challenging relationships with superpowers at a time of global instability, it is in our strategic interests to work closer together. We are natural partners who share democratic values, support for global multilateralism, and a commitment to peace and security for our citizens and people everywhere.
I also believe that the world can benefit from more Canada and more Japan. If we increase our collaboration, we can offer people everywhere a shining example of a future built upon peace, partnership and prosperity. As Prime Minister Shinzo Abe said in January at the World Economic Forum in Davos, “hope is the most important ingredient for economic growth.”
Goldy Hyder is the CEO and president of the Business Council of Canada. He was invited by the Government of Japan to explore opportunities for increasing trade ties between both countries.
February 20, 2024
February 5, 2024