Good afternoon, ladies and gentlemen.
Good afternoon. This is Julian Dierkes from Vancouver.
Mr. Chairman, and members of the committee, thank you very much for giving me this opportunity to speak to you today. I want to speak to you a little bit about the perspective people might take of this partnership agreement with Japan.
I had an opportunity last year to take 10 of our students to Japan in the summer and engage in a simulation of exactly these negotiations with some Japanese students and colleagues at Hitotsubashi University. In the preparation for that, we had a chance to talk to many stakeholders, both in Canada and in Japan, to get a sense of what the motivators are for these kinds of agreements. And so I will speak a little bit today about exactly what the context is in Japan. You've heard a fair bit of testimony here about the potential economic benefits, but why would the Japanese engage in this agreement? Given my research on Japan, that's something I hope to share a little bit with you.
I first want to emphasize that in addition to the economic benefits and some of the risks that you've heard a fair bit of testimony about, these kinds of partnership agreements obviously also have a very highly symbolic and very important role to play, especially in bilateral relations. The symbolic value derives sometimes from economic activities. And by signing such an agreement, a given market, in this case Japan, becomes that much more prominent to producers, to businesses in another country, in this case Canada; but it's also a sign of continued engagement and friendship, if you will.
Japan and Canada recently celebrated 75 years of diplomatic relations. There are very strong people-to-people links. The project that I mentioned where we had students join us in a process in Tokyo is a good example of that, but this kind of agreement will be highly valuable in cementing the relationship between Canada and Japan.
It'll be of specific value to Japan. As has been mentioned before, Japan is a relative latecomer to bilateral trade agreements, given their strong multilateral commitments previously. So they don't currently have an agreement with a fellow-developed economy at the level of the G-7 or the G-8. So being able to negotiate such an agreement with Canada would be a real prize in the Japanese context. Overall, I would emphasize that even the negotiations, and certainly a signed agreement, would be valued very highly in Japan for its symbolic value.
TPP was just mentioned by Richard White and has come up in previous testimony as well, so I want to give you that context briefly. The Japanese government has marked TPP as its highest international trade policy. Prime Minister Noda is pursuing participation in TPP for Japan in the same way that Canada is. Obviously, you will be much more familiar with Canada's position on this than I can be.
For TPP specifically, the most significant supporters in Japan are within the government. The two ministries that are primarily involved in the system are the Ministry of Foreign Affairs and the Ministry of Economy, Trade and Industry. Then outside of government, it's primarily large industries, large businesses that perhaps stand to benefit most from these kinds of agreements. On the other hand, the opposition is also quite significant to TPP in Japan and is making a conclusion to or participation in TPP relatively unlikely, given that the opposing agricultural interests are highly organized and have taken a very strong stand against TPP.
Part of the context is also that the current governing Democratic Party of Japan, which used to be a party rooted primarily in the cities, is beginning to discover that now that it is a governing party it also has rural constituencies. So to the extent to which it may have been in favour of international trade and the liberalization of trade in the past, it may be somewhat waning today as its rediscovers some of those roots.
On TPP, I would say while it is a high priority for the Japanese government, it may be relatively unlikely to happen. That, in many ways, leaves bilateral agreements as the next best, or certainly the next, priority of activities for the Japanese government.
The most important potential here for Japan increasingly, of course, is northeast Asia. It's important to remember that Japan has become very much an Asian economy; it's much more integrated into Asian trade flows than it was even 5 or 10 years ago. This is not just in terms of trade, but also in terms of the significant investments that Japan has been making, particularly in China, but really also across Asia. So as their attention is shifting, if there were any opportunity to explore perhaps a trilateral trade agreement in northeast Asia with China and Korea, that would be an opportunity that the Japanese government would clearly jump at. That would have very significant support from the business community there as well. As we saw in the news last week, that possibility seems relatively remote, but when it does happen, it may be a priority aim of the Japanese government.
As was mentioned earlier by Mr. Boutziouvis, the closest competitor of Canada in negotiations with Japan is Australia, but those negotiations have been going on for a very long time. Australia is also perceived to be a bit of a hard-liner, if you will, in the TPP situation, so it's a little unclear where those negotiations might go. In some ways that leaves Canada as a very good choice for the Japanese government to pursue for the next bilateral agreement.
On these bilaterals, the areas of support for these agreements—again, those would be the government and large industry primarily—would be just the same. Perhaps the opposition to bilateral agreements would be less highly organized than it is against the TPP. I would also mention, as an aside, that apart from very organized agricultural interests in the Japanese deliberations about these kinds of trade agreements, NGOs and other civil society groups play a relatively lesser role than would generally be the case in Canada.
That leaves me thinking a bit about the Japanese context that presents itself as an opportunity for negotiations with Canada. There are a number of reasons to think that Canada looks very attractive to Japan in this context. One of the reasons is more economic: it's internal to this kind of trade agreement, in that the trade is somewhat asymmetrical.
Some of the issues of particular concern in both countries are not in areas receiving many exports from the other country. Obviously there are other regions where there's much more overlap. For example, you would not be expecting large exports in the forestry sector—you heard testimony about this the other day—to come from Japan to Canada. So those negotiations will always be difficult. But given the asymmetry, there may well be room for some productive engagement.
I would emphasize that Canada currently enjoys a very strong reputation, particularly within Japan. When you have an opportunity later this year to go on your study tour to Japan, you will certainly see that. Part of that is linked to the Canadian response to the triple disaster last March. It's important to emphasize in this context that the government, and particularly the embassy in Tokyo, has been very proactive. It was seen as a very important step that Canada was the first country to drop import restrictions on Japanese food products after the triple disaster, and official Tokyo very much took note of that.
The concerns that grew out of the triple disaster in Japan about food and energy insecurity make Canada a very attractive partner. In most observers' eyes within Japan, which is worried about food and energy security, Canada is an obvious partner and a very strong and likely partner.
I'd also mention that there has been a lot of relatively low-level progress in Canadian-Japanese relations recently that hasn't received much attention. For example, the apology by the Japanese governments to Canadian POWs held during the Asia-Pacific war was one of those steps, and likely the Canadian decision announced during Prime Minister Harper's visit to Tokyo to open a satellite office in Osaka after the general consulate had been closed there, were relatively small but important steps in further developing a very important relationship.
Finally, I want to echo a comment that Mr. Boutziouvis made earlier, and that is to remember that Japan is now very much engaged in Asia but it's also potentially a stepping stone for Canadians into Asia. That is true for economic relations as much as for political relations. An agreement of this kind would certainly represent a huge boost to that relationship. It would motivate further people-to-people contacts and it would be seen in Japan as a very positive step. Should the negotiations proceed quickly, an agreement could be reached.
Thank you very much. I am looking forward to your questions.