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November 19, 2009

Canada and India take another step toward a free trade agreement

Canada and India took the next step toward a mutual free trade agreement as the Canadian Minister of International Trade, Stockwell Day, and India's Minister of Commerce and Industry, Shri Anand Sharma, signed papers to establish a joint study group this week.

Canada and India had agreed to initiate exploratory discussions toward a comprehensive economic partnership agreement (CEPA) in January 2009.

The Government of Canada held initial public consultations from March to April to obtain advice and views on priorities, objectives and concerns of Canadians regarding this initiative.

The next step is to begin the formal exploratory process with India through a Joint Study, which will examine key sectors of interest and the possible parameters of a comprehensive trade agreement between the two countries.

A high-quality CEPA that eliminates tariffs on most goods, opens up opportunities in services, establishes rules in investment and reduces non-tariff barriers could give Canadian exporters considerable preferential access to the large and growing Indian market, potentially ahead of other key competitors. A CEPA with India could deliver commercial benefits across many sectors of the Canadian economy including, among others, forest products, nickel, aircraft, electrical machinery, fish and seafood products and agricultural products.

The Joint Study Group, which will be comprised of officials from both Canada and India, is tasked with conducting the Joint Study. It will make recommendations, including on the potential launch of formal CEPA negotiations. The group is expected to finalize its report within six months.