More deals could be imminent between Canadian companies and the automotive and electronics powerhouses of Japan, with the two countries’ governments set to agree Thursday to deepen their trade relationship.

Japan’s Trade Minister Yasutoshi Nishimura is in Ottawa, where the two countries will announce two agreements: one to cooperate in the battery industry, and another to work together on scientific projects involving artificial intelligence, advanced manufacturing, clean technology and life sciences.

In an interview with The Logic Wednesday, Trade Minister Mary Ng said that she could not “scoop” any forthcoming deals between Japanese and Canadian companies, which she said could be announced as soon as today. But Ng said that Japanese companies are looking for “real partners in what we need to be building together.” 

“Canada is … big in the automotive industry,” Ng said. “The automobiles of the future are certainly going to be electric vehicles. The battery supply chain is hugely important. We are mining sustainably critical minerals in the North. We are processing them in Canada. We certainly want to be working with Japan.”

What it means: Corporate deals between Canadian and Japanese companies are one part of a larger push between the two governments under the two new “Memorandums of Cooperation.” In practical terms, Ng said, “it means that my trade commissioner services are working much, much more closely” with those in Japan. 

“If you’re a company that wants to get into one of these supply chains, or you’re looking for a Japanese investor…having this mechanism, which is a memorandum of cooperation between the two governments, really facilitates this,” she said. 

Why it matters: Batteries power a wide variety of products, from electronics to utilities to cars—all industries where Japanese companies dominate. EV batteries are a particularly big business in Canada, which is helping fund Volkswagen and Stellantis’s gigafactories, and which hopes a battery supply chain here could help support more investments. 

Several Japanese companies are already woven into Canada’s EV industry. Toyota, which is sharpening its focus on battery technology, built more vehicles in Canada than Ford, Stellantis and GM combined in 2021, with Honda close behind, according to the Global Automakers of Canada group. Meanwhile, Osaka-based Panasonic is connected to Canada through its customer Tesla, which funds battery research in Canada.

The government estimated that as of 2020, about 65,302 Canadians were employed thanks to exports to Japan. 

The bigger picture: The trade alliances come as global superpower China threatens to tighten its grip on key technologies like AI and critical minerals while the U.S. and its allies work to build alternative supply chains. The U.S. Inflation Reduction Act, with its efforts to stimulate that country’s domestic cleantech industries, has sparked a cleantech investment war that has seen Japan lobby for better inclusion in North American trade and supply chains. Asked if the subsidy war is still a concern amid new trade deals, Ng said the new agreements are evidence that the existing trade agreement is working well and Japanese companies are seeing the value proposition of strong allies like Canada. 

“What you’re seeing is real collaboration,” she said. “Canadian industry and exporters are seeing an increase in businesses that are growing into the Japanese market, and this is across all sectors.”