OTTAWA – Canada and India are quietly setting the stage to restart formal free trade talks as the Trudeau government searches for economic alternatives to China following the dispute over the Meng Wanzhou case- two Michaels.
Trade negotiators from both countries held four “consultation meetings” in the last year via video, and the most recent meeting in October saw preliminary proposals on trade by the two countries. on both sides, said Anshuman Gaur, Deputy High Commissioner of India to Canada.
“They talked about possible approaches and paths forward,” he said in an interview last week.
The new commitment is the result of India’s aggressive new trade policy, known as “early harvest”, which has seen the country work towards taking increased steps towards free trade agreements. due to its comprehensive scale with the UK, the European Union, Australia, the United Arab Emirates and now Canada.
It also comes as the federal government stands up in the aftermath of a deep three-year diplomatic freeze with China after Michael Spavor and Michael Kovrig were recently safely returned to Canada. They spent more than 1,000 days in prisons in China, seen by many as retaliation for the RCMP’s arrest of Huawei executive Meng Wanzhou under a US extradition order in 2018.
Canada is looking to reduce its economic dependence on China and diversify into new Asian markets. It recently conducted formal trade negotiations with the Association of Southeast Asian Nations – known as ASEAN – a 10-nation bloc that includes the Philippines, Indonesia and Thailand.
The Liberal government’s November 23 throne address acknowledged that priority, saying: “A changing world requires adaptation and expanding diplomatic engagement. Canada will continue to work with key allies and partners, and making deliberate efforts to deepen partnerships in the Indian Ocean and across the Arctic.”
International Trade Secretary Mary Ng discussed the possible deal with her Indian counterpart, Piyush Goyal, this past summer in Rome during a G20 meeting.
“I think India and Canada absolutely have an opportunity to deepen our trade and commerce relationship,” Ng said in an interview.
Canada began trade negotiations with India more than a decade ago under the Conservative government of Stephen Harper. The restart stopped in 2018 when Canada was in the midst of an intense renegotiation of the North American Free Trade Agreement with the US and Mexico instigated by former US president Donald Trump.
Prime Minister Justin Trudeau made a controversial visit to India in February 2018, where he and his family faced harsh criticism back home for wearing traditional Indian dress.
Gaur dismissed any suggestion that Trudeau had wrongly trampled his country, saying the need to focus on the US and Mexico was well understood.
None of that, he said, has dampened India’s interest in doing business with Canada in an effort to boost $12.8 billion in annual bilateral trade between the two countries.
That has made Canada one of the priority countries in India’s “early harvest” trade strategy, which is a really stepping stone approach to accelerating progress towards agreements. broader free trade. It involves pursuing partial progress in reducing tariffs on certain goods and services while leaving tougher issues unresolved for more comprehensive free trade agreements. after that.
“We try to formalize the agreement on those areas where differences are minimal, and we continue to discuss some areas where there are greater differences,” said Gaur.
India’s pursuit of trade deals comes as many countries, including Canada, are taking their position with China seriously amid growing human rights concerns.
Like the Chinese leader, Indian Prime Minister Narendra Modi has also been widely criticized for continuing human rights abuses, including in a September report by Human Rights Watch accusing his government of forcing critics to monitor, politically motivated prosecutions, harassment, online fraud, tax sweeps and the closure of activist groups.
Gaur suggests Canada and India could build on a common trait that neither China shares: their common-law legal heritage inherited from Britain.
“Parliamentary democracies have more understanding of other countries’ systems. There needs to be more trust between them,” said Gaur. “That level of familiarity, the reassurance that this is a rule of law, this is a democracy, is a very powerful motivator for a lot of people to see India as a potential trading partner.”
Gaur said China will remain an “important trading partner for everyone” based on its huge manufacturing capacity and market size.
“But diversifying and building more connections is often not seen in the context of limiting your relationships with others,” he said in an interview at the Indian High Commission in Ottawa.
Meanwhile, Ng said, “Canada has always pursued its trade based on Canadian values, and interests are guided by Canada’s interests first.”
The Canadian Business Council, which represents the most powerful executives of Canadian companies, is also bullish on India and is conducting research on the possible benefits of a commercial relationship. extend.
Trevor Kennedy, the council’s director of international trade and policy, said India was a “complicated country to negotiate” because it was a federation with broad regional interests. But the sheer size and high growth mean Canada has to make a concerted effort, noting that others are pursuing deals with India.
“Whether it’s rising protectionism in the US or a new version of China, big markets like India are really important because they provide us with a number of alternatives,” said Kennedy. position.
“We don’t want to be left behind if our major trading partners are moving forward.”
In addition to agricultural products and natural resources (uranium is Canada’s main source of energy for India’s nuclear reactors), Kennedy said the potential for growth in financial services between the two countries is huge. big. He cites the growing investment by Canada Pension Plan and companies like Manulife.
This week, a delegation of 40 Indian IT companies toured Canada, stopping in the Maritimes, Toronto, Montreal, Ottawa and Waterloo, Ont.
“The Canadian government has invested heavily in areas like artificial intelligence and machine learning. And now is the time to reap the benefits by scaling, with partnerships with IT companies from Canada. India,” said Gaur.
Gaur said the behind-the-scenes work among government negotiators is well underway, especially after the most recent virtual meeting of trade officials.
“They have shared location papers” and both sides are “getting a better understanding of each other’s positions,” said Gaur.
India is hoping for a Canadian response in the coming weeks, hopefully before Christmas, as our political leaders are pushing very hard, he said.
This Canadian Press report was first published on November 28, 2021.
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