Canada, India agree to work towards free trade
The Brock Press | 11/24/09
Canada, India agree to work towards free trade
By: Geoffrey Blain
Prime Minister Stephen Harper’s trip to India resulted in the beginning of an agreement between the two countries to work towards negotiating a free-trade agreement.
Harper, and Indian Prime Minister Dr. Manmohan Singh, announced they intend to develop a Comprehensive Economic Partnership Agreement. A joint study group will be formed to begin researching the concept and the two leaders agreed that they hope the agreement can begin to be negotiated in about a year.
"India’s rapidly growing economy and its commitment to expand its investment regime will provide significant opportunities for investors in a variety of sectors, including infrastructure, education, life sciences, science and technology and natural resources among many others," Harper said in a statement.
"In making India a priority market, our government’s commitment is translating into collaboration and progress in a number of important areas."
The agreement will increase economic trade between the two countries. By removing barriers to trade, the flow of goods between the two countries should be less difficult for exporters and more attractive to importers. Harper and Singh said that they hope the agreement will increase bilateral trade to $15 billion annually over the next five years, up from $5 billion currently.
The agreement is particularly important for Canada, whose trade is dominated by the United States. The sinking US dollar is giving US importers less purchasing power to buy Canadian goods and services. High unemployment south of the border is also reducing the demand for Canadian exports. This new agreement with one of the world’s fastest growing economies will help Canada diversify its trade and provide protection from an extended recession in the US.
"Despite our occasional differences, [we] have always been friends," Harper said of Canada and India.
"[…] The untapped potential in our relationship is also undeniable. Where we are today is not where we need to be. Yes, we are good friends and partners, but we could be better friends and partners."
"Our countries share tremendous commercial interests and have great potential for increased trade," Harper said. "Between us, our GDP is well on its way to $4 trillion. Yet at the moment, we are only doing $5 billion worth of business per year."
Singh also pointed out the untapped trade potential that exists between the two nations.
"There is a significant scope for greater investment by Canadian companies in the areas of high technology and infrastructure development, and enhancing cooperation in the areas of science and technology, agriculture, mining, natural resources, education and energy," Singh said during a press conference with Harper.
"To further boost our trade, which is currently below US $5 billion, we have decided to set up a giant study group to examine the possibility of a bilateral, comprehensive economic partnership agreement," said Singh, who has held office since 2004.
"We are also working to further strengthen the institutional mechanisms of cooperation such as a bilateral investment promotion and protection agreement, and a social security agreement."
Singh will be in Washington this week as US President Barack Obama’s first state guest for three-days of meetings to discuss trade, security and further cooperation between India and the western world.
