Canadian PM’s visit next week to herald FTA work
Economic Times, India
Canadian PM’s visit next week to herald FTA work
10 November 2009
By Amiti Sen, ET Bureau
NEW DELHI: India and Canada are expected to formally start work on a free trade agreement (FTA) when Canadian Prime Minister Stephen Harper
visits New Delhi next week. The two sides are expected to set up a joint study group to examine the feasibility of a comprehensive economic cooperation agreement that would free up trade in goods, services and investment, a commerce department official told ET.
“Both India and Canada feel that the two sides could gain from a bilateral arrangement. The two have already informally discussed the possibility of a bilateral agreement and formal work is expected to begin now,” the official said. Mr Harper is scheduled to be in India between November 16 and 19.
Canada is facing strong competition from China in the US, its traditional export market, and is now looking at diversifying its presence in other parts. India being one of the fastest growing emerging economies, it is interested in expanding ties with the country.
Bilateral trade between India and Canada was about $3.8 billion in 2008-09 (as per latest RBI figures) with Canada running a trade surplus of a little more than $1 billion. India is seeking to increase its exports of both industrial and agricultural goods to Canada and seek better opportunities for its service professionals.
“Lower import duties for products such as garments and textiles could help India increase its exports substantially to Canada,” the official said. India’s exports of garments to Canada face stiff competition from least developed countries such as Bangladesh, which get preferential access to the market.
A joint report prepared by the Confederation of Indian Industry and Canadian Council of Chief Executives pointed out that India and Canada would benefit enormously from an agreement to eliminate tariffs on a substantial majority of their trade in goods. India’s tariffs are on average higher than those of Canada.
India’s exports to Canada comprise mostly textiles and apparel, jewellery, and chemicals, iron and steel products. Canada’s exports to India are aerospace and aircraft parts, cereals, vegetables and fertilisers, pulp and paper products, machinery and equipment (electrical and nuclear/boiler), and ores, slag and nickel products. In the area of services, the report pushed for a more liberal visa application system and higher labour mobility.
