India pushes new trade talks with Canada after two problems with Michael’s China

It also comes as the federal government emerges from the aftermath of its three-year diplomatic freeze with China after Michael Spavor and Michael Kovrig were recently safely returned to Canada. They spent more than 1,000 days in Chinese prisons in what is widely viewed as retaliation for the RCMP’s arrest of Huawei manager Meng Wanzhou in 2018 under a US extradition warrant.

Canada is trying to reduce its economic dependence on China and diversify into new Asian markets. It recently started formal trade talks with the Association of Southeast Asian Nations – known as ASEAN – a 10-country bloc that includes the Philippines, Indonesia and Thailand.

The Liberal government’s November 23 address confirmed this priority when it said: “A changing world requires adaptation and expansion of diplomatic engagement. Canada will continue to work with key allies and partners while making conscious efforts to deepen partnerships in the Indo-Pacific and Arctic. ”

International Trade Minister Mary Ng discussed the possible agreement with her Indian counterpart Piyush Goyal in Rome last summer at a meeting of the G20.

“In my opinion, India and Canada have absolutely opportunities to deepen our trade and trade relations,” said Ng in an interview.

Canada began trade talks with India more than a decade ago under the Conservative government of Stephen Harper. The on-off process ended again in 2018 when Canada was in the middle of intensive renegotiations of the North American free trade agreement with the USA and Mexico, which were instigated by former American President Donald Trump.

Prime Minister Justin Trudeau paid a controversial visit to India in February 2018, where he and his family were harshly criticized at home for dressing in traditional Indian clothing.

Gaur dismissed any suggestion that Trudeau was rubbing his country the wrong way, saying the need to focus on the US and Mexico was understood.

None of this, he said, detracts from India’s interest in doing business with Canada to boost $ 12.8 billion in bilateral trade between the two countries each year.

This has made Canada a priority country in India’s “early harvest” trade strategy, which is a true stepping stone towards accelerating progress towards broader free trade agreements. It is about making partial progress in lowering tariffs on certain goods and services, while leaving more difficult issues unresolved for later, broader free trade agreements.

“We are trying to reach agreement on the areas where the differences are the smallest and we are continuing to discuss some of the areas where there are greater differences,” said Gaur.

India’s pursuit of trade deals comes because many countries, including Canada, are taking stock of their position vis-à-vis China in the face of growing human rights concerns.

Like China’s leaders, Indian Prime Minister Narendra Modi has been widely criticized for perpetuating human rights abuses, including in a September Human Rights Watch report accusing his government of monitoring its critics of politically motivated persecution, harassment, and online trolling Suspending tax raids and closing down activist groups.

Gaur suggested that Canada and India can build on a common trait that no one shares with China: their common law legacy inherited from Britain.

“Parliamentary democracies have a better understanding of each other’s system. There has to be more trust between them, ”said Gaur. “This level of familiarity, this certainty that this is a country with the rule of law, this is a democratic country, is a very strong motivation for many people to view India as a potential trading partner.”

Gaur said China will remain an “important trading partner for all” given its enormous manufacturing capabilities and the size of its market.

“But diversifying and building more connections is usually not seen in the context of restricting your relationship with someone else,” he said during an interview with the India High Commission in Ottawa.

Meanwhile, Ng said, “Canada always conducts its trade on the basis of Canadian values ​​and interests, which are primarily guided by Canadian interests.”

The Business Council of Canada, which represents the most powerful executives of Canadian companies, is also very optimistic about India and is conducting research into the possible advantages of an expanded trade relationship.

Trevor Kennedy, the council’s director of trade and international policy, said India was “a complicated negotiating country” because it was a federation of broad, regional interests. But its sheer size and rapid growth require Canada to make a concerted effort as others are pursuing deals with India.

“Whether it’s increasing protectionism in the US or a new version of China, big markets like India are really critical because they offer us some alternatives,” said Kennedy.

“We don’t want to be left behind when our big trading partners are ahead of us.”

Aside from agricultural products and natural resources (uranium is a major Canadian source of energy for Indian nuclear reactors), Kennedy said there was great potential for growth in financial services between the two countries. He cited rising investments from the Canada Pension Plan and from companies like Manulife.

This week a delegation of 40 Indian IT companies toured Canada and made stops in the Maritimes, Toronto, Montreal, Ottawa and Waterloo, Ontario.

“The Canadian government has invested heavily in sectors like artificial intelligence and machine learning. Now is the time to take advantage of scaling by partnering with Indian IT companies, ”said Gaur.

The work behind the scenes between government negotiators is well underway, Gaur said, especially after the recent virtual meeting of trade representatives.

“They have joint position papers” and both sides get a “better understanding of the other’s position,” said Gaur.

India hopes for a response from Canada in the coming weeks, hopefully before Christmas, he said, “because our political leaders are pushing very hard”.

This report by The Canadian Press was first published on November 28, 2021.

Mike Blanchfield, The Canadian Press


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