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Canon’s Japan Ceo Wants Free Trade Deal With Canada
Fujio Mitarai, chairman and chief executive officer of camera and copier giant Canon Inc., told The Globe and Mail.
“I think above all the Japanese people now have a clear understanding and recognition that we are into an era of low fertility with an aging society as a whole,” Mr. Mitarai said in an interview at Canon’s head office in Tokyo. “That means that in order for us to continue to grow we need to expand the free-trade areas as much as possible.”
As part of a deal, Canada would likely look to expand access to the Japanese market for agricultural and forest products as well as services. Japan is the world’s largest net importer of agricultural and seafood products with imports of about $67.9-billion, including about $3.2-billion from Canada.
Its home renovation market is estimated at $50-billion, which represents an opportunity for Canadian forest products companies to boost their business in the country. In total, Japan was Canada’s fifth-largest merchandise trade partner in 2010. Exports to Japan totalled $9.2-billion, while Japan shipped goods worth $13.4-billion to Canada.
For the Japan-based car companies in Canada, the main issue is the 6.1-per-cent tariff that Canada levies on vehicles imported from outside North America.
If Canada signs South Korean and EU deals that eliminate that tariff for auto makers from those regions, Japanese auto makers bringing vehicles into Canada from outside North America will be at a disadvantage, even though Honda Motor Co. Ltd., and Toyota Motor Corp. have large assembly plants in Ontario that combined employ about 10,000 people.
Eliminating the tariff on subcompacts and other entry-level vehicles such as the Hyundai Accent imported from South Korea would have an impact on sales in that segment, where profit margins are razor thin and products are priced only a few hundred dollars apart.
“In the entry-level car market you’re separated by dollars in monthly payments,” said Toyota Canada’s Mr. Beatty.
The subcompact segment has become more competitive in recent years with the addition of new offerings by Mazda Canada Inc., and the North American-built Ford Fiesta and Fiat 500 from Chrysler.
The tariff issue also plays out to a lesser extent in the luxury segment where prices and margins are higher, so a 6.1-per-cent change is less noticeable. Nonetheless, eliminating the duty on European-built vehicles would give Audi Canada, BMW Canada Inc. and Mercedes-Benz Canada Inc. an advantage over Toyota’s Lexus models imported from Japan as well as Acuras brought into North America by Honda Canada and Infiniti brand vehicles sold by Nissan Canada.
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