Trudeau and Abe at their first meeting at the time of the APEC summit in Manila, November 2015. Photo by AP.
Prime Minister Justin Trudeau will be discussing the Trans-Pacific Partnership (TPP) and liquefied natural gas (LNG) exports with Japanese Prime Minister Shinzo Abe in Tokyo tomorrow.
The Canadian Press reports, “Japan is expected to tout the benefits for Canada of the TPP, a huge, 12-country treaty that would deepen trade connections across the Asia-Pacific region.” CTV notes, “Benoit Hardy-Chartrand, Asia-Pacific Expert at the Centre for International Governance Innovation, said that if ratified, the TPP could benefit the Canadian mining and oil industry [in Asia].”
Japan clearly wants the TPP to be ratified.
Just after the October 19, 2015 federal election, Reuters reported, “Abe and Canada’s prime minister-designate Justin Trudeau agreed to promote the Trans-Pacific Partnership (TPP), both seeing the free-trade deal as beneficial to the region, Japan’s foreign ministry said in a statement. The two leaders exchanged views on the pact during a 15-minute telephone call on Friday [Oct. 30], Japan’s foreign ministry said.”
But there is also the deepening recognition that the TPP could be defeated in the United States.
That’s because there is significant opposition in the U.S. Congress and presidential candidates Hillary Clinton, Donald Trump and Bernie Sanders have all expressed their opposition to the TPP.
The National Post notes, “[Given the] Trans-Pacific Partnership trade deal, may not survive the U.S. Congress or a Trump or Clinton presidency, …Canada may start to lay the groundwork for a separate side trade deal with Japan, which both countries had been considering before they joined the TPP talks.” The Globe and Mail adds, “If the Trans-Pacific Partnership agreement fails to be ratified, [the head of the Canadian Council of Chief Executive John Manley] is urging Mr. Trudeau to renew trade talks with Japan.” Canada and Japan began negotiations on a free trade agreement in 2012, but set those aside given the TPP talks.
The Canadian Press also reports, “As well, Japan will be expecting to import more liquefied natural gas from Canada. Japan is the world’s largest buyer of LNG.” The National Observer notes, “”[Japan’s ambassador in Ottawa Kenjiro] Monji believes the bilateral trade could get a boost from a key Canadian energy source that Japan needs: liquefied natural gas. Japan, the world’s biggest buyer of LNG, is hoping Canada will issue necessary environmental permits to allow companies to export it from British Columbia.” Ambassador Monji says, “Canada is one of the most-promising potential exporters to Japan because … liquefied natural gas occupies a still very important share in our energy policy.”
The National Post adds, “With so much of Japan’s oil and gas imports coming from the Middle East through the Strait of Malacca and across the South China Sea, Stewart Beck, who once ran Foreign Affairs’ Far East desk and is now president of the Asia-Pacific Foundation of Canada, said one way that Canada could help Japan was by offering it secure energy supplies. He acknowledged, however, that this represented a dilemma for Trudeau who was still ‘grappling’ with the tradeoff between using the export of natural resources as a strategic issue and its environmental concerns.”
The TPP – or even a Canada-Japan FTA – and LNG agenda also intersect.
Ambassador Monji has noted that Japanese companies are involved in several LNG projects in Canada. Should a future Canadian government decide that the environmental impacts of LNG projects still in development are too great on the land and water, it is conceivable that those Japanese companies could use the investor-state dispute settlement (ISDS) provision in the TPP to sue Ottawa for future lost profits from those investments.
In terms of timelines, the Trudeau government is set to decide on the Pacific Northwest LNG terminal in the coming weeks and must ratify the TPP by November 2017.
Trudeau and Abe will also be at the G7 summit in on Thursday in the Japanese city of Ise-Shima.
