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Japan and Canada have agreed to resume a joint study on the possibility of a bilateral free-trade agreement, Japanese government sources said Wednesday.

The latest development is in line with the government’s policy to push for FTAs in the hope of boosting the sluggish economy.

But it is apparently not easy for Japan to swiftly end the joint study and enter into full-fledged free-trade negotiations with Canada, as Tokyo would likely face the difficult decision on whether it can eliminate tariffs on farm products such as wheat and pork.

The two countries conducted a joint study on the FTA issue between 2005 and 2006. But they ended the study without agreeing to start free-trade negotiations due to the difficulty in ironing out their differences.

On the reported agreement, the Canadian Chamber of Commerce in Japan said in a release that the chamber “believes that an economic partnership agreement will help to leverage mutual synergies that will enhance prosperity in both Canada and Japan.”

The release also said a free-trade pact will have a number of benefits, including “opening new markets for goods and services” and “creating more secure access to resources.”

Both Japan and Canada have showed interest in a wider regional free-trade initiative called the Trans-Pacific Partnership, which is currently being negotiated with the United States, Australia and other Pacific Rim nations.

The TPP is intended to require members in principle to reduce all tariffs to zero within 10 years, a tough condition for Japan, which is known for its long-standing reluctance to open up its agricultural market.

Japan has so far excluded politically sensitive agricultural items such as rice and wheat from tariff elimination in FTAs signed with other economies.

Mexico pact tweak

Japan and Mexico have agreed to amend a bilateral free-trade agreement to further liberalize their trade in areas such as farm products, Japanese officials said, adding that each government will try to secure early parliamentary approval of the revision.

Under the revision, Japan will expand low-tariff import quotas for items such as beef, pork, chicken and orange juice. But the farm ministry denied that the revision of the FTA, which took effect in 2005, will affect domestic farmers.

Mexico has agreed to make efforts to abolish tariffs on auto parts and paper for ink-jet printers earlier than the initially scheduled 2014, possibly by 2013, the officials said.

The agreement was reached Monday in Mexico during a meeting cochaired by Ikuo Yamahana, Japan’s parliamentary vice foreign minister, and Beatriz Leycegui Gardoqui, Mexico’s vice minister for foreign trade.

“The vice ministers recognized that market-access improvements will give important benefits for both countries, opening new opportunities for the exporters,” their joint statement issued after the meeting said.

The vice ministers also confirmed that bilateral trade and investment have substantially increased in volume since the free-trade pact came into force.

According to the Foreign Ministry, the total volume of trade between Japan and Mexico stood at ¥1.13 trillion in 2010, up from ¥796.2 billion in 2004.

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