The Economic Times7 April 2005
James Peterson, Canada's cabinet minister for international trade, recently visited India with a trade mission. Here he talks about his plans for boosting Indo--Canada trade relations.
What are the steps being taken to boost trade between India and Canada?Despite a large Indian population living in Canada and the simplicity of communication due to use of English, bilateral trade is only $2.5 billion. But this means we have an incredible opportunity to enhance trade and investment relations. The ease of doing business and the growing US economy has meant that Canadians have not looked elsewhere. Reforms undertaken in India are a very important sign that India is open for business to the rest of the world. Changes in investment rules for telecommunications and financial services will mean that many more Canadians will look to invest there.
Has Canada thought of a strategy to boost trade with India through enhanced flow of investment?There can be no better recognition of our intentions of evolving better commercial relations between Canada and India than a trade mission comprising Canadian busi-nesses and government officials and led by the trade minister himself. We have dealt here with Canadian-Indian business councils and Canada-India chambers of commerce. We are working with them to encourage them to mobilise memberships. This is not needed for large Canadian companies but for the small and medium-sized firms which have big pot-ential yet haven't looked outside Canada yet. We are also looking at bilaterals with Indian companies to encourage more Indian companies who want to access the US using Canada as a bridge. We encourage Indian companies to enter Nafta through Canada. There are several advantages, such as low cost of doing business that Canada can offer.
What are the current trends in bilateral economic co-operation?We are negotiating a foreign investment protection agreement (FlPA) with India. This will help Canadian companies to invest in India by providing recognition and protection to investments. We are trying to tell Canadian companies about the commonalties between the Indian and Canadian business environments — the history of common law in India, the democratic government and the reform movement since 1991 which have all been continued in India's recent budget. We are also working on a science and technology agreement with India in order to share research development and promote commercialisation of products. The five key areas that have been identified where Canada can contribute to India's development are agro foods, information technology and communications, energy, transportation and financial services.
What are the expectations of Canada in terms of India's role at the WTO?The US and Europe have to get rid of agricultural subsidies. These subsidies have to be phased out over a period of time. One opportunity to do so has already been lost. We have to address issues like loss of preferences, revenue erosion and trade-related technical assistance. I have expressed to the Indian commerce minister Kamal Nath how critical this is. I believe India has contributed to ambitious resolution of this round. I look forward to working closely with Mr. Nath. We are scheduled to meet twice again this year. Right now, some countries trade strictly through bilateral agencies but a multilateral arrangement will have to be evolved.
Market economics means that countries should trade with whoever they get the best deal. Under the WTO we are going to further liberalise trade in manufactured goods and services. The message to Canadians is that we have to be globally competitive. If that means partnering with foreigners they should do it. We want to show to Canadians that India is experiencing 8 per cent growth rates. Some say it could surpass China by 2010. Goldman Sachs has said that by 2040 India will be the biggest economy. Indian companies are now global MNCs. We want to show Canadians it is a one billion market with a huge English speaking middle class. Indian IITs are rivalling MIT and Stanford and two million people graduate there every year.