OTTAWA — Canada moved a step closer to a comprehensive free trade deal with India on Friday with the release of a joint research paper that strongly urges closer economic ties.
At a news conference on Parliament Hill, India’s industry minister said such a deal would benefit both countries — but especially Canada.
Answering a question about the fiasco over poor preparations for the Commonwealth Games in New Delhi, Anand Sharma noted that India is emerging as an economic powerhouse and anyone who misses the boat will be the loser.
“India is the fourth largest economy. In the next 10 years India is going to quadruple its GDP, we will be one of the three major economies … so those who engage with us will benefit,” he said.
For those who don’t, “whose loss will it be?”
Canadian Trade Minister Peter Van Loan said the report from the joint study group shows Canada’s economy could benefit by anywhere from $6 billion to $15 billion annually, and boost bilateral trade by 50 per cent.
The biggest benefits would accrue to the forest, energy and manufacturing sectors, he said.
The report finds India stands to realize similar gains.
“There are big gains for India, big gains for Canada,” said Van Loan, who noted that India is ready to begin negotiations and that “at some point” he hopes to have a mandate to launch talks.
While Canada’s merchandise trade with India remains low, about $4 billion, exports have been increasing rapidly and trade is on schedule to reach $15 billion annually in the next five years.
Van Loan and Sharma said the next step is to create six working groups dealing with infrastructure, mining, energy, agrifood, education and information technology.
Proceeding to formal talks is not a given, but both countries have records recently of moving aggressively on bilateral trade deals throughout the world.
Both Canada and India are currently in talks with Europe. Sharma said India is also close to reaching deals with Japan and Malaysia.
As well, Sharma noted that the two countries are natural partners as democracies and members of the Commonwealth.
The joint study group report notes that many stumbling blocks to free trade remain, including over whether to include labour and environmental standards as side agreements or in the main deal.
Canada is moving to strengthening standards on those issues, whereas India’s practice so far has been to exclude labour and environmental standards in trade agreements.
The report also cautions that non-trade impediments in India, such as government red tape and regulations, could pose impediments.
But despite the hurdles, the study group said it found “sufficient common ground to recommend moving ahead with next steps toward negotiation of a comprehensive agreement covering substantially all trade in goods and services; investment, trade facilitation, and other areas of economic co-operation.”