Changing Gears

“I don’t even know what street Canada is on,” Al Capone once said. But Canada’s prime minister, Stephen Harper, is determined to make sure he puts Canada on the map with one key global power: Japan.

Map courtesy of About.com

If he accomplishes his goal, it could have ramifications for the automobile industry, agriculture and the Midwest in general.

Harper opened negotiations this weekend with Japan on a free trade agreement. Negotiators were careful to caution against any quick resolution, because it can take years to negotiate such deals, and Japan isn’t known for speedy decision making.

But, a Canada-Japan trade agreement would join one between Japan and Mexico — and leave the United States as the only North American country without one. 

There are some big trade numbers involved. Canada ships $4.6 billion in goods each year to Japan, and imports $12.8 billion, largely in automobiles and auto parts.

“Canadian businesses have much at stake in these negotiations,” said Jayson Myers, president of the Canadian Manufacturers and Exporters association. “Japan is a strategic commercial partner; however it is also a country with whom we’ve had a persistent trade deficit when it comes to manufacturing.”

There’s no guarantee that a trade agreement would change the trade deficit, but there could be some significant changes as a result. For example, Canada charges a 6.1 percent tariff on imports of Japanese autos and auto parts.

The United States charges a 25 percent tariff  on imports of small trucks, and it’s imposed various penalties in the past.

A free-trade agreement could help sway Japanese automakers, who recently have been on an expansion drive at their American factories and could send more production overseas due to the strong yen.

Toyota recently indicated that it might expand at its Cambridge, Ontario, plant, and friendly relations between the two countries might influence Toyota, or another Japanese automaker when it’s time to choose a plant site.

And the pact could mean more opportunities for Canadian farmers, who have always faced obstacles in shipping products to Japan.

As you’re thinking about Canada, here’s list of 10 songs by Canadian artists about our neighbor, with some familiar songs and others you may never have heard of. And no, the list does not include Blame Canada.