Geo-economics key to India-Canada talks
- Dr. Faisal Ahmed -
Amid reports that the Canadian Prime Minister Justin Trudeau has been snubbed during his India visit, he will be meeting Indian Prime Minister Narendra Modi today. However, the reports on “snubbing” largely seem to misrepresent the essence of this crucial visit which has huge geo-economic significance for both countries. Even the Canadian newspaper Calgary Herald rejected the claims and wondered if it was a deliberate one. Also, there are other precedents to believe that such reports related to snubbing are imprecise.
Interestingly, a closer look at the itineraries of some of the other world leaders reveals that it is the prerogative of the visiting dignitaries themselves. For instance, the U.S. President Barack Obama directly arrived in Mumbai in 2010 and met 26/11 survivors, attended the U.S.-India Business Council meeting, participated in Diwali celebrations with school children, interacted with university students in the Town Hall, and then reached New Delhi on the last leg of his tour. He then paid a visit to Humayun’s Tomb and Raj Ghat and held meetings with the Prime Minister and the President. And needless to mention that PM Manmohan Singh and President Obama too shared good friendly relations.
Similarly, PM Trudeau reached New Delhi with his family and thenwent on to cherish the beauty of the Taj in Agra. Later, he travelled to different cities, met Shahrukh Khan and Aamir Khan, held meetings with business community, visited the Sabarmati Ashram, visited the Golden Temple and the Jama Masjid, played cricket with Kapil Dev and Mohammad Azharuddin, and will be meeting PM Modi today. This itinerary in itself speaks volumes about the profundity of bilateral engagement, the confidence building measures and the people-to-people contact that PM Trudeau has been striving for. But the fact remains that the Punjab has huge geopolitical significance for PM Trudeau as the Indian Sikh community constitute 1.5% of the Canadian population.
The recent tweet by PM Modi saying that he is looking forward to meet PM Trudeau and will hold talks on further strengthening India-Canada relations in all spheres, has already set the momentum and intensity for the bilateral meeting scheduled today. PM Modi has also gone a step further and posted a photo from his previous visit and appreciated PM Trudeau’s deep commitment to strengthen bilateral ties.
In fact, India-Canada relations have to be seen largely in context of diaspora as well as geo-economic pursuits.Besides security and strategic cooperation, and cooperation in civil nuclear energy and space sciences, there are three significant trade and geo-economic issues which requires enough bilateral policy space to create a win-win situation.
First and foremost is the pace of negotiationof the bilateral trade and investment agreement. India and Canada are negotiating a Comprehensive Economic Partnership Agreement (CEPA). The tenth round of CEPA negotiations was held few months ago, and India has reportedly expressed the desire to include agreement on services as well. As per the statistics from International Trade Centre Geneva, India’s merchandise export to Canada decreased from US$ 2.01 billion in 2012 to US$ 1.97 billion in 2016. Whereas, India’s imports from Canada which stood at US$ 2.56 billion in 2012 increased to US$ 3.46 billion in 2016. Thus, the trade balance in favour of Canada also increased from US$ 547.67 million in 2012 to US$ 1.67 billion in 2016.
Moreover, statistics of the Export Import Data Bank, Department of Commerce reveals that in 2016-17, India’s top five exports to Canada (at 2-digit HS level) includes organic chemicals (HS code 29); pharmaceutical products (HS code 30); articles of iron or steel (HS code 73); articles of apparel and clothing accessories, not knitted or crocheted (HS code 62); and, natural or cultured pearls, precious or semiprecious stones, imitation jewellery etc. (HS code 71). Also, India’s top five imports from Canada during the same period includes edible vegetables and certain roots and tubers (HS code 07); natural or cultured pearls, precious or semiprecious stones, imitation jewellery etc. (HS code 71); mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes (HS code 27); aircraft, spacecraft, and parts thereof (HS code 88); and, fertilisers (HS code 31).
Also, in terms of investment liberalisation, both countries are re-negotiating a bilateral investment agreement as well and there exists huge potential for bilateral services trade in sectors such as financial services, logistics, education, tourism and information and communication technologies.
Secondly, agriculture and its import duties need to be thoroughly examined anda pragmatic solution should be reached. In the present delegation, the ministers accompanying PM Trudeau are the ministers for innovation; small business and tourism; science; infrastructure; foreign affairs and defence. This reflects the depth of engagements across multifarious sectors that Canada is striving to augment in its bilateral commitments with India.
Moreover, the rigour of this engagement is such that when Minister of State Gajendra Singh Shekhawat received PM Trudeau, Canadian experts have even questioned why PM Trudeau did not take his Agriculture Minister to accompany him. This is because India recently increased import duties on certain pulses, which is hampering Canadian exports to India in this sector. Since this issue is also on the agenda, Canadian experts believe that their Agricultural Minister could have deeply negotiated on this issue.Moreover, Canada has an advantage in geo-spatial planning and geographic information system which can be leveraged for forecasting and developing sustainable agricultural practices. Even PM Trudeau also referred to the potential in agricultural sector and specifically those in pulses trade while addressing students in Ahmedabad.
Finally, yet another crucialaspect which requires policy attention is the negotiating stance of Canada in the revised Trans-Pacific Partnership (TPP) agreement. Recently at Davos, PM Trudeau condemned the rise of what he called an anti-trade tendency in globalization, and also agreed to sign the revised TPP deal, which has now suspended some intellectual property provisions that were supposed to be obstacles for the Canadian stakeholders. After the U.S. pulled out of the TPP agreement, which was once seen as complementing President Obama’s Asia pivot, there was a stalemate. But countries like Japan and also Canada have tried to restore the negotiations. Also, the U.S. President Donald Trump has called for renegotiating the North American Free Trade Agreement (NAFTA) in which Canada is also a member. A re-negotiated NAFTA may be an improved version of the existing agreement, but both Canada and Mexico have their own apprehensions related to such a process. On the other hand, India is not a member of TPP, but is negotiating another mega trade agreement i.e. the Regional Comprehensive Economic partnership (RCEP). In the wake of signing of both TPP and RCEP, the geo-economic rebalancing in the Asia and the Pacific region, which comprises of states like India, China, U.S., Japan, South Korea, Australia, and Canada among others, need to be cautiously observed.
About the AuthorDr. Faisal AhmedTrade and Geopolitical Expert (Indo-Pacific)
Dr. Faisal Ahmed is a Trade and Geopolitical Expert specializing on Indo-Pacific region. He is presently working as an Associate Professor and Chair of International Business Area at FORE School of Management, New Delhi. His research and consulting areas include free trade agreements, WTO issues, global value chains, south-south cooperation, and trade & geopolitics. He held the position of Consultant to the United Nations Economic and Social Commission for Western Asia and has also led projects supported by the Ministry of Commerce & Industry, and Ministry of External Affairs, Govt. of India.
He holds Masters and Ph.D. degrees from India in the area of international trade, and an Executive Certification in Geopolitical Analysis from Geneva. He is a member of prestigious international associations like International Studies Association, Connecticut, USA; and, International Political Science Association, Montreal, Canada. His research papers have been published in national and international refereed journals, including those indexed in Scopus and Thomson-Web of Science. He has also published several opinion articles, book chapters and monographs.
He has edited a book India’s Foreign Policy: West Asia and North Africa, and is the author of the textbook Business Environment: Indian and Global Perspective published by Prentice-Hall publications. He has visited several countries for academic work and is invited as Speaker and Panelist by leading think tanks, Embassy and inter-governmental organisation in India and abroad. Also, he has been on expert panel in national and international media like Times Now TV channel and Vietnam News TV on trade and geopolitical issues. Dr. Ahmed's articles have appeared in leading newspapers like The Financial Express, Bangkok Post, The Hindu Business Line, South China Morning Post, The Statesman, Business Standard, The Santiago Times, and The Economic Times.
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