India and Canada: A New Era of Cooperation

June 2, 2009

Thank you for the opportunity to appear this evening.  I recognize that you are looking at Canada’s relationships with a number of key economic partners, but I would like to focus my opening remarks on one of those countries, India.

In particular, I would like to highlight the work that the Canadian Council of Chief Executives (CCCE) has done with our counterparts at the Confederation of Indian Industry (CII) in laying the groundwork for a potentially major expansion of the bilateral relationship.

Private sector work on the Canada-India bilateral arrangement began in 2005, when our Prime Ministers recommended the creation of a CEO Roundtable to offer ideas for strengthening economic ties.

The first India-Canada CEO Roundtable was subsequently held in March, 2007, when our Council mounted a CEO mission to Delhi and Mumbai.  Roundtable participants issued a joint statement that called for closer bilateral commercial ties and the establishment of ambitious five-year trade and investment targets.

A second India-Canada CEO Roundtable was held in Montreal in June 2007.  It focused on investment promotion and the potential for enhanced private sector exchanges.  At this meeting, business leaders also were asked by trade ministers from both countries to provide advice on the possibility of launching negotiations toward a free trade agreement.

The Canadian Council of Chief Executives and the Confederation of Indian Industry began by looking at the bilateral trade context and exchanging ideas for potential recommendations.  Our organizations circulated drafts to reference groups composed of CEO Roundtable participants and experts in various fields.

In a report released in September 2008, and endorsed by both CCCE and CII, the CEO Roundtable participants concluded that Canada and India should enter into a new era of cooperation, and should move quickly to deepen and accelerate the growing ties between our countries.

They recommended that existing bilateral agreements and understandings should be augmented if necessary and combined into a single, modern, high-quality and comprehensive economic agreement.

Given the broad scope to bolster and deepen our partnership and to cooperate more closely, they encouraged trade ministers to begin such negotiations as soon as possible.

In the November 2008 Speech from the Throne, Canada’s Government signaled its intent to pursue new economic agreements in Asia, and in January 2009, India and Canada agreed to initiate exploratory discussions towards a Comprehensive Economic Partnership Agreement.

India’s Trade Minister Kamal Nath and Canada’s International Trade Minister Stockwell Day said that the goal is to take our economic partnership to the next level.  And as the CEO Roundtable had recommended, the ministers agreed that their officials should meet to begin talks on the parameters of a comprehensive trade agreement.

Now that India’s elections are over, we are hopeful that our countries can begin discussions as soon as possible, that we can quickly implement our finalized bilateral foreign investment protection and promotion agreement (FIPA), and that we can wrap up negotiations on a nuclear cooperation agreement.

How far we go in this new strategic endeavour with India will depend in large measure on the commitment of our respective leaders across the political, business and non-government communities.

To ensure rapid progress, we will need continued visible support at the highest political levels, in particular by our Prime Ministers.  Our countries should hold bilateral summits on an annual basis to maintain and add momentum and to deal with any major concerns or opportunities that may emerge during negotiations.  We should hold the first of these summits as soon as possible.

Ministers should continue to meet regularly and should continue to engage directly with Indian and Canadian business leaders. After a very successful visit by Minister Day to India this past January we hope that India’s Minister of Commerce and Industry will be able to visit Canada soon.

Business leaders would like to see the India-Canada CEO Roundtable process continue, and are ready to provide ongoing advice to senior government and elected officials whenever that might prove helpful.

Both India and Canada would benefit from an agreement to eliminate tariffs on a substantial majority of their trade in goods.  Exporters and supply-chain participants would benefit directly from the opportunity to develop their businesses and diversify their export markets.  Trade pact negotiations in turn will raise awareness of other possibilities for even broader engagement with India.

In the view of our business organizations, Canada and India should aim for a trade and economic agreement that would include the following:

• Elimination of duties on substantially all trade in non-agricultural products within 10 years;
• Sensitivity toward livelihood issues in agriculture in India in the negotiations but recognition of opportunities in the sector as well;
• Reciprocal but flexible commitments to simplify rules of origin;
• A binding dispute-settlement mechanism;
• A flexible mechanism to eliminate non-tariff barriers; and
• Transparency in customs rules and procedures and concise and legally enforceable rights and obligations in other regulatory areas.

Expanded trade in services between Canada and India should build on current discussions at the WTO and should be fully compatible with the WTO’s General Agreement on Trade in Services.  Our services trade should be progressively liberalized but broad in scope.  There should be progress on the mutual recognition of professional qualifications and greater regulatory transparency on services trade.

A future economic agreement could incorporate the India-Canada FIPA into an investment chapter to strengthen existing provisions.

Private sector leaders have raised issues that extend well beyond the scope of a traditional FTA.  We have concluded that a more holistic approach to the bilateral relationship is needed to produce benefits for both India and Canada in the form of new markets for goods and services, opportunities for investment and stronger economic growth.

Areas of cooperation that have been outlined include science and technology, education, energy and the environment, and various sectoral initiatives.  In addition, greater cooperation should be considered in areas such as culture; security; infrastructure; competition policy; intellectual property; double taxation; totalization; visa matters; standards testing, labeling and certification procedures; trade facilitation; greater engagement in public private partnerships; and public procurement.

CCCE and CII do not see the Canada-India relationship as just an economic proposition.  Rather, we need to develop a framework for a bold and comprehensive leap in our relationship.

Let me close by suggesting that the current global recession makes it more important and more urgent for our two countries to move forward together.

Canada and India have both been more fortunate than most in avoiding the worst impacts of the downturn.  All the more reason, then, for us to set an example for the world by leading the way toward greater openness and cooperation rather than by following others down the short-sighted and counter-productive path of protectionism.

I hope that our governments move quickly to consider and act on the recommendations that have been put forward by our two business communities, and that they move directly into negotiations without unnecessary delays for further joint study.  We see great potential to serve the interests of people across both countries, and we will continue to help in any way we can to ensure that India and Canada realize their full potential in the years ahead.

Thank you.