Free Trade Agreement Canada India

While Canada and Indian leaders agree that the two countries should maximize bilateral trade and economic relations, Ottawa seems much more enthusiastic about pursuing a free trade agreement (FTA) than New Delhi. Some of the challenges are technical. With respect to services, Canada uses a negative list, which means that all services that are not included or developed in the future are affected by the liberalization measures of the agreement. India supports the World Trade Organization agreement that only the sectors covered by the treaty are subject to the revised rules. And Fast points out that India`s proposal for investment agreements does not contain a “click” clause stipulating that after the liberalization of a sector, investment restrictions cannot be reintroduced. The event brought Canadian Foreign Minister Fran├žois-Philippe Champagne and Indian Foreign Minister Subrahmanyam Jaishankar to a roundtable discussion on trade between the two countries. Referring to his former role as federal minister of international trade, Mr. Champagne said he felt that “the stars are moving towards a free trade agreement.” Harsh Pant, a professor of international relations at King`s College London, says Prime Minister Narendra Modi will live up to his commitments after the Trump administration canceled the Paris climate accord. But the Indian government is unlikely to welcome the debate on these issues under the EPA.

“These are not directly related to trade negotiations and should stay out of the discussion,” says Pant, who describes India`s long-standing attitude, although he says Modi favors transactional relationship and reciprocity in international relations, so there could be room to give and receive. Expanding trade and investment in large, fast-growing markets, including India, is a priority for the Canadian government. India`s GDP growth, expected to reach 7.2% in 2017, is one of the highest in the world. Differences in time, resources and approach between the two bureaucracies have also slowed progress towards an agreement. Canada`s negotiating team of 20 or 25 people was often sitting around the table by only four or five Indian colleagues, says Stewart Beck, CEO of the Asia-Pacific Foundation of Canada and Canada`s High Commissioner for India from 2010 to 2014. And caution is the watchword on the Indian side. “What we understand from Indian technocrats is that they are very systematic,” says Dr. Anita Singh, who studies bilateral relations. “They`re fine, line by line, word for word.” There is currently a food tariff policy and non-tariff barriers in India that limit trade and growth for Canadian agri-food producers.