CTV News in Japan: Record-setting number of Canadian executives head to Tokyo as CUSMA review looms

The skyline of downtown Tokyo. (Judy Trinh)

TOKYO - A record-setting number of Canadian executives are in Tokyo this week to participate in what has become the largest Team Canada trade mission in the Indo-Pacific region.

Nearly 300 people representing 175 Canadian companies will gather at the Sheraton Miyako hotel in downtown Tokyo to network with Japanese executives. The Canadians have one goal in mind: to forge partnerships in the land of the rising sun.

Three of Prime Minister Mark Carney’s top ministers responsible for the International Trade, Industry and Defence portfolios have been dispatched to Japan to help pave the way. But some analysts say talk of opportunities could be overshadowed by concerns about Canada’s recent embrace of Japan’s biggest regional competitor – China.

“Japan is a trusted partner. It is a G-7 member. It is a fellow democracy with whom we have an important strategic relationship. We cannot jeopardize that relationship because we’re trying to pursue diversification with China,” warns Vina Nadjibulla, vice-president of the Asia Pacific Foundation.

Japan is Canada’s fifth largest trading partner with more than $35 billion dollars in conducted in two-way trade last year. It is also the third biggest investor in Canada. But Carney’s January agreement with China’s President Xi Jinping to remove nearly all the tariffs on Chinese EVs is raising concerns. The flood of cheap Chinese EV’s across Asia has cut into the bottom lines of every Japanese automaker.

The Carney-Xi agreement caps the number of Chinese EVs entering Canada this year to 49,000 vehicles, in exchange for lowering Chinese tariffs on agricultural products such as canola and seafood. The terms need to be renegotiated in order to extend beyond 2026.

“So basically, this fall there need to be discussions about extending the canola and other tariff relief that Canada got. And the question is, will China ask for more concessions?” Nadjibulla said, adding that she expects Industry Minister Melanie Joly to face tough questions in Japan about whether those quotas will be increased, and under what terms she will allow Chinese car companies to build vehicles in Canada.

Joly is expected to meet with government officials and stakeholders on Monday, while International Trade Minister Maninder Sidhu has scheduled meetings with Toyota and Honda later in the week.

‘Rises above the cloud of CUSMA’

Goldy Hyder, the president of the Business Council of Canada says deepening trade ties with Japan will ultimately depend on how Canada navigates the review of the Canada-U.S.-Mexico free trade agreement.

“Japan has made it clear that for continued investment – in particulars in auto manufacturing – they want us to maintain preferential access to the United States of America, and frankly to North America," Hyder said in an interview from Tokyo.

While questions surround the future of Japanese auto manufacturing in Canada there is growing optimism about exporting more Canadian military technology across the Pacific.

In March, Japan’s cabinet approved a record defence budget of more than US$66 billion for the 2026 fiscal year. The call for bolstering spending comes amid China’s rapid modernization of its military and its ongoing threats toward Taiwan.

“Japan needs to respond to an increasingly assertive China in the region. Then you have North Korea on the western flank and Russia on the northern flank. The Japanese live in a tough environment,” says Jonathan Berkshire Miller with the Pendulum Group. The analyst says Japan has been dependent on the U.S. relationship, and is now looking to shore up its defence industrial base by working with allies like Canada.

Unlike automakers who are hesitating to expand in Canada without access to the broader North American market, Miller says defence investment “rises above the cloud of CUSMA.”

“Defence officials don’t worry about (tariffs). Defence capabilities should be premised on threat perception and assessments.”

Of the 175 Canadian companies participating in the trade mission, more than 40 are in the defence and security sector. The companies build drones and underwater surveillance systems, while others develop satellite technology and have expertise in AI, and countering cyber attacks.

On Monday, Defence Minister David McGuinty will tour the Yokosuka Naval Base – the principal headquarters and operational port for the Japan Maritime Self-Defense Force – and meet with his Japanese counterpart.

Several memorandums of understanding are expected to be signed between Canadian and Japanese companies over the week. Other than defence, companies from the agriculture, forestry, clean energy and technology sectors are also participating in the trade mission. The Team Canada trade mission will end on Friday.

CTV News’ Judy Trinh will have special coverage from Tokyo of Canada’s record trade mission in the Indo-Pacific this week