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Canadian Prime Minister Stephen Harper and Japanese Prime Minister Yoshihiko Noda have announced plans to begin negotiating a free trade agreement aimed at deepening trade and investment ties between the two nations.

The negotiations will build on a recently released Canada-Japan Joint Study, which estimates that a free trade agreement could boost Canada’s gross domestic product by up to $3.8 billion annually and increase exports to Japan by as much as 67 percent. Canada also is negotiating free trade agreements with India and the European Union.

“Our government is creating jobs, growth and long-term prosperity for all Canadians through increased trade,” said Harper in a prepared statement. “A free trade agreement with Japan … would strengthen the Canadian economy by generating billions of additional dollars in commercial flows between our two countries.”

Canadian Pacific officials touted the joint announcement by Harper and Noda. Japan is the world's third-largest national economy and was Canada's largest source of job-creating investment from Asia, CP officials said in a prepared statement. Japan also is Canada's fourth-largest merchandise export market, with exports totaling $10.7 billion in 2011, up 16.1 percent compared with 2010. CP and its supply chain partners enable the trade flows, CP officials said.

“Free trade enables long-term growth, promotes investment and creates greater supply chain certainty — all of which supports our growth in the Asia-Pacific Gateway,” said Jane O'Hagan, CP's executive vice president and chief marketing officer.