India expects speedy talks for a mini trade deal with Canada after Prime Minister Justin Trudeau returns to power. The last round of talks was held in July after which the talks were postponed due to elections.
“Since there has been no change in the government, we hope to resume talks after the government takes over. Although Canada did not commit to a mini trade deal in the last round of talks in July, we expect both sides to agree on a future roadmap soon,” a government official said under condition of anonymity.
Trudeau won a third term in Canada’s midterm election earlier this month, but he missed out on a majority. Trudeau had decided to gamble on the early vote and capitalize on his government’s handling of the coronavirus pandemic, which included massive spending to support individuals and businesses and a push for higher vaccination rates.
India and Canada returned to the negotiating table in July after a gap of nearly four years to explore the possibility of a small trade deal. They have been negotiating a Comprehensive Economic Partnership Agreement (CEPA) since 2010, with the latest round of talks held in August 2017.
India has held several rounds of virtual discussions with Canadians since June last year. In October, a bilateral meeting was held to explore the option of an early harvest or interim agreement. A scoping paper was also shared with Canada.
India is keen to sign small trade deals with Australia, the UK and the United Arab Emirates. India’s long talks for a mini trade deal with America also did not work.
India and Canada have not made any progress since the tenth round of talks in August 2017.
“At that time, there were constructive discussions on various issues including cross-border trade in goods and services, e-commerce, telecommunications, sanitary and phytosanitary measures and technical barriers to trade. Since then, Canadian and Indian authorities have held several stocktaking meetings, most recently in November 2020. India is a high-priority trading partner and the Government of Canada continues to work with the Government of India to enhance and create our trade relationship to its full potential. Opportunities for Canadians, including continued work to make progress on an agreement, according to an update on the Canadian government’s global affairs portal.
India is keen to have a stronger service agreement under the proposed CEPA, as Canada is not a large market for Indian goods.
India is interested in creating more jobs for its IT professionals by facilitating easy work visas under the trade agreement. Canada, a major producer of pulses, is keen to increase its agricultural exports to India.
The issue of signing an investment treaty also needs to be resolved by both sides. Negotiations have been completed for a Foreign Investment Promotion and Protection Agreement (FIPA) between the two countries under the United Progressive Alliance government. However, FIPA was not signed after the National Democratic Alliance government introduced a model draft Bilateral Investment Treaty (BIT), canceling all existing BITs.
In FY20, India’s exports to Canada stood at $2.8 billion and imports were at $3.9 billion, leaving a deficit of $1.1 billion.
Bloomberg and Reuters contributed to this story
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