Toronto, June 28 – Canada’s trade talks with India, to avoid mutual disappointment, need ambitious goals, supported by a strategic approach and political will, according to a report from the C.D. Howe Institute. In “Does Canada Have an India Strategy? Why it Should and What Both Sides Can Gain from Comprehensive Talks,” author Dr. Wendy Dobson warns that Canada’s scattershot record on trade agreements raises the question of whether Canada’s trade policy is ad hoc or if we have, instead, a trade strategy.
After years of an economic relationship that can only be described as cool, Canada and India have begun negotiating a Comprehensive Economic Partnership Agreement (CEPA). A trade agreement with India, the world’s second-most populous country, Professor Dobson says, has potential. Yet for both countries the size of the economic relationship with the other is modest, and both have long lists of uncompleted trade agreements begun with third countries. Accordingly, Dobson says that to overcome differences, commitment and enthusiasm will be required on both sides. To live up to the title of “comprehensive” for an enlarged bilateral economic relationship, the CEPA negotiations will need vision and ambition.
Canada’s main interests in the CEPA are transparency and non-discrimination for Canadians in the Indian economy, to take advantage of the efficiencies of Indian information technology services providers, and to gain greater access to the Indian and wider Asian markets, using India as a platform. For India, the strategic priority could be greater access to the US market, through Canada, given that a comprehensive US-India bilateral free trade agreement does not seem to be in the cards. A negotiation with Canada could be a second best route to this, as a strategic signal of India’s potential importance to the North American economies. But thorny issues stand in the way to achieving the mutual benefits available, says Dobson, including differing approaches to services trade liberalization and barriers between the two countries to investment and temporary movement of people.
Click here for the full report.
For more information contact:
Dr. Wendy Dobson, professor, Rotman School of Management;
Co-director of the Rotman Institute for International Business;
Daniel Schwanen, Associate Vice President,
Trade and International Policy, C.D. Howe Institute, 416-865-1904; email: cdhowe@cdhowe.org