EPA with Canada would help Japan, open NAFTA door: Quebec official

by Eric Johnston

Staff Writer

Japan should consider concluding a bilateral economic partnership agreement with Canada, which could then be used as a card against the United States in the Trans-Pacific Partnership negotiations, Quebec’s minister of international relations and foreign trade said this week during a trip to the Kansai region.

Canada and Japan began negotiations on forming a comprehensive and high-level EPA in November 2012, before Japan joined the TPP talks last year. Canada entered the TPP talks in October 2012.

In an interview with The Japan Times, Quebec minister Jean-Francois Lisee said the bilateral negotiations are more advanced than the TPP talks and would be reasonably easy to settle, especially now that Canada and the European Union signed a free trade accord last year.

A Canada-Japan EPA would cover some of the same ground, he said.

“One of the key elements in an EPA is the opening of the government sector at the provincial and municipal levels,” he said, adding that Quebec is prepared to make offers to Japan that it has already made to European countries, once the two countries sign an EPA.

Lisee said a Canada-Japan EPA would provide benefits beyond the two nations. “If the Japanese want to enter the North American market, there is an open door. It’s the North American Free Trade Agreement, and the best way to enter is to go through the door from Canada, or Quebec,” he said.

“Japanese companies that invest in Quebec will have access to NAFTA, and to our agreement with Europe,” he said, adding that Europe would also have access to the Canada-Japan agreement, meaning tariffs would be eliminated in three markets.

“They’ll also have a competitive advantage over the Americans and the Chinese and Koreans, who do not enjoy these agreements,” Lisee said.

An EPA with Canada could also be used as a lever for the Japanese within the TPP against the United States, he added.

“The Japanese can tell them: ‘Listen. We dealt with Canada. You can do better within the TPP,’ ” he said.

Quebec has had a presence in Japan since 1973, and its ties to the Kansai region, particularly Kyoto and Osaka, are strong.

It has a series of technical collaboration agreements with Kyoto Prefecture, particularly in green building and biomass, an area of renewable energy that receives a lot of attention elsewhere but is still a neglected renewable energy source in Japan, compared with solar and wind power.

“Quebec is a very big forestry producer, and we’ve had this transformation from the traditional use of wood to modern, prefabricated housing and buildings, and treated wood that is resistant to fire, which is very good for countries like Japan with lots of seismic activity. In addition, we have the technology to turn wood into biomass fuel pellets, an area Kyoto is interested in,” he said.

As the world moves toward renewable energy, a key problem is how to store electricity generated by solar, wind, geothermal, hydro and biomass in lithium batteries. Quebec has an abundance of lithium and Japanese firms, including Sumitomo Osaka Cement and Mitsubishi Shipbuilding, have been given contracts under license to manufacture lithium batteries by the owners of the technology’s patent rights, which include Hydro Quebec and the University of Montreal.

In 2012, Quebec’s exports to Japan totaled just over $1 billion, making it the province’s seventh-largest export market. Pork and pork products accounted for 28 percent of the total, while automobiles accounted for 44 percent of Japan’s exports to Quebec. Fifty Japanese firms employing 6,000 people have a presence in Quebec.