Maybe now Canada will start to use the potential it has due to our large South Asian population.
Canada and India vow to deepen ties
theglobeandmail.com
SHAWN MCCARTHY
Globe and Mail Update
January 21, 2009 at 7:55 AM EST
OTTAWA — Canada and India have agreed to launch talks aimed at negotiating a free-trade agreement as the two countries seek to warm up a bilateral relationship that has suffered from decades of frostiness and neglect.
International Trade Minister Stockwell Day met in New Delhi yesterday with Indian Prime Minister Manmohan Singh and Trade Minister Kamal Nath, and they agreed to bolster the meagre trade and investment flows between the two countries.
Relations with India have been strained since the country used Canadian nuclear technology to detonate an atomic bomb in the early 1970s. But the Harper government - which has wooed India while playing cool to China - won favour in New Delhi this summer by supporting India's bid for international acceptance of its nuclear energy program.
Several executives from Canada's nuclear and uranium industries accompanied Mr. Day on this week's visit. The South Asian giant plans to undertake a massive program to build sorely lacking infrastructure, including as many as 25 reactors to meet pressing demands for power.
The Canadian Trade Minister said the two governments are ready to embark on a new era of co-operation, including broadening economic ties.
"We now have agreement with the Minister of Commerce and Trade that we will instruct our officials to begin discussions on what a broader and more comprehensive economic relationship will look like," he said in a telephone interview.
"There's a clear focus on looking at freer trade between our two countries and seeing how far that takes us."
But Canada faces an uphill battle in negotiating a free-trade arrangement with India, given that it has failed to conclude any such deals with the fastest-growing Asian countries, said Paul Evans, a professor at the University of British Columbia's Liu Institute for Global Issues and senior adviser to the Asia-Pacific Foundation of Canada.
Prof. Evans said concluding a traditional free-trade agreement should not be the main priority as the two countries expand their economic ties. Instead, he advocated increasing science and technology co-operation, including university exchanges, and measures to address barriers to investment.
"There are a number of things we have to do to advance economic relations with India, and a free-trade agreement has never been the most important set of problems that we need to tackle with India," he said. "What we need is a New Economy relationship with India, not an old, trade-based relationship."
Two-way trade between Canada and India was a mere $3-billion in 2007, an amount that Canada and China trade in three weeks. Most of Canada's exports are forest and agricultural products and minerals.
India's emerging strength is based more in the service sector, while China has become an exporting juggernaut. Indian corporations are also beginning to invest abroad, including in Canada, and the two countries have concluded an investment protection agreement.
Still, the Canadian Council of Chief Executives and the Confederation of Indian Industry issued a report this fall urging their two governments to begin negotiations toward a free-trade deal.
The Canada-India Business Council, which has also called for closer trade ties, said yesterday's announcement is only a modest first step. "It's going to require a political commitment on both sides to make this happen, said Peter Sutherland, the group's vice-chairman.
Mr. Day insisted the push for greater co-operation with India in no way minimizes China's growing importance for Canadian business, though he added that Canada and India share "common values" including rule of law, democracy and respect for human rights.
But Prof. Evans said there has been a clear embrace of India and a cooling attitude toward China from the Harper government, even though China holds far more promise for Canadian businesses.
"But getting traction in India is going to be a real challenge," he said. "The ground-level obstacles to doing business in India are enormous. They are at least as large as in China and, from my perspective, larger." |
