The head of a Canadian big-business group proposed Tuesday that Japan and Canada push preparations for a free-trade agreement so the two nations can drop trade barriers and secure a freer flow of commerce.

Thomas d’Aquino, president of the Business Council on National Issues, made the proposal at a luncheon with Japanese business leaders, including Toyota Motor Corp. Chairman Hiroshi Okuda.

Okuda, who is concurrently chairman of the Japan Federation of Employers’ Associations, recommended that a series of friendly events, such as exchange visits by Canadian and Japanese business leaders, be held because they “would pave the way for future conclusion of a proposed FTA.”

The BCNI chief told the leading Japanese industrialists that Japan would be able to secure a strong foothold for business activities in North America under such an accord.

An FTA would oblige both sides to remove a range of trade barriers, including tariffs, while alleviating remaining restraints on mutual direct investment.

An FTA would be opposed by Japanese farmers, because farm produce accounts for 60 percent of Canada’s exports to Japan.

The BCNI chief said Canada is ready to enter talks with Japan on creating a freer trading environment while temporarily shelving the issue of lifting curbs on Canadian farm imports.

He proposed the two sides proceed with preparatory talks on concluding an FTA by letting deregulation in fields related to manufactured goods and information technology-related service trade precede deregulation in farm produce.

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