Canadian, Indian trade ministers hold 1st annual talks

19:28, September 25, 2010      

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Trade ministers of Canada and India ended their first annual dialogue Friday, with a goal to increase bilateral trade to 15 billion U.S. dollars annually in the next five years.

Canadian Minister of International Trade Peter Van Loan and visiting Indian Minister of Commerce and Industry Anand Sharma welcomed the establishment of a formal discourse and committed to maintaining open and productive discussions.

While reviewing bilateral trade and investment relations, the ministers encouraged the continued strengthening of economic ties between the two countries, a joint statement said.

The ministers released the Canada-India Joint Study Group Report, which examines the feasibility of a Comprehensive Economic Partnership Agreement (CEPA). They welcomed the report's recommendation that negotiations be initiated towards a substantive and ambitious CEPA.

The joint study group comprised Canadian and Indian officials was established in November 2009, when Canadian Prime Minister Stephen Harper paid an official visit to India. It was tasked with examining the feasibility of such an agreement covering trade in goods and services, investment, trade facilitation, and other areas of economic cooperation as a single undertaking.

The study shows that freer trade in goods and services between Canada and India could also increase Canada's gross domestic product by at least 6 billion U.S. dollars, boost bilateral trade with India by 50 percent, and directly benefit Canadian sectors such as forestry, energy and manufacturing.

"Minister Sharma and I welcomed and endorsed the Joint Study Group recommendation that negotiations should be initiated toward a substantive and ambitious trade agreement that would be to our countries' mutual benefit," Van Loan told reporters.

The ministers also looked forward to the early signing, ratification and implementation of the Social Security Agreement, and an early conclusion of the Foreign Investment Promotion and Protection Agreement.

"These two agreements will make a significant contribution to the commercial and economic interaction between the two countries," the statement said.

Van Loan and Sharma agreed there was significant potential for sustained growth in trade and investment flows between the two countries, and reiterated their prime ministers' commitment to increasing trade to $15 billion annually in the next five years.

They welcomed negotiations for an Audio-visual Co-production Agreement and looked forward to the signing of a memorandum of understanding on Cooperation in Road Transportation later this year.

The ministers also reviewed the current status of bilateral cooperation in critical sectors such as energy, environment, mining, information and communication technology, science and technology, education and training, tourism, financial and other services, agriculture, and infrastructure, noting the opportunities for private sectors to play a role.

Both sides agreed in principle to establish working groups on the private-public-partnership (PPP) model focusing on infrastructure, energy and mining, agro-processing, information and communication technologies, and education.

The ministers looked forward to meeting with the participants of the Canada-India Chief Executive Officer (CEO) Roundtable and welcomed the opportunity to engage with members of the business communities of both countries.

In this regard, both sides agreed to expedite the establishment of the Canada-India CEO Forum, a high-level representative body that would recommend policy initiatives and identify impediments to the enhancement of investment and trade between the two countries.

The ministers also discussed the upcoming seventh annual Trade Policy Consultations, to be held in New Delhi on October 18.

"Canada's trade and investment partnership with India is on an exciting path, and an economic partnership agreement will further broaden and deepen that partnership," Van Loan said. "Our government has made India a key priority in Canada's foreign and trade policy agenda."

Sharma said he was optimistic the negotiations, which are being conducted on a sector-by-sector basis with side agreements on environmental issues and labor standards, would end with an agreement.

"There has been a visible increase in engagement between Canada and India," Sharma told reporters before meeting with Canadian Prime Minister Stephen Harper.

The ministerial meeting was also attended by key CEOs and business leaders, including Pierre Duhaime, President and CEO of SNC-Lavalin Group; Richard Legault, President and CEO of Brookfield Renewable Power; Hari Bhartia, President of the Confederation of Indian Industry, and Co-Chairman and Managing Director of Jubilant Organosys Ltd.; and Deep Kapuria, Chairman of Hi-Tech Gears Ltd.

According to Canadian statistics, bilateral merchandise trade between Canada and India in 2009 totaled approximately 4.1 billion Canadian dollars (4 billion U.S. dollars), a decrease of 10.3 percent from 2008 due in large part to the global economic crisis.

However, the reduction in bilateral merchandise trade between Canada and India was less significant than the decrease in Canada's overall trade for 2009, which was 21.2 percent. Despite the lower numbers in 2009, bilateral merchandise trade between Canada and India has increased by 70 percent since 2004.

While Canadian merchandise exports to India totaled 2.1 billion Canadian dollars (2 billion dollars), an 11.3 percent decrease from 2008, imports from India reached 2 billion Canadian dollars (1.9 billion dollars), a 9.1 percent decrease from 2008, resulting in a 141.8 million Canadian dollar (138.2 million U.S. dollars) trade surplus for 2009 for Canada.

This is the second year in a row that Canada has registered an annual trade surplus with India, which it had not previously done since 1992.

Despite the recent decrease in bilateral trade, India ranked as Canada's 10th destination for merchandise exports in 2009 (up from 13th in 2008) and as its 20th source of imports (up from 22nd in 2008).

Top Canadian exports include vegetables (mostly peas and lentils), fertilizers, and machinery; top imports from India include organic chemicals, knit apparel, woven apparel and precious stones and metals (primarily diamonds). (1 U.S. dollar = 1.02670037 Canadian dollars)

Source: Xinhua


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