Canada and India Trade Agreements

Canada and India Trade Agreements: Opportunities and Challenges

Canada and India share a long-standing relationship built on cultural, political, and economic ties. As two of the fastest-growing economies in the world, both countries recognize the importance of bilateral trade agreements to foster economic growth and create jobs for their citizens.

In recent years, Canada and India have made significant progress in strengthening their economic ties through various trade agreements. Let`s take a closer look at these agreements, their potential benefits, and the challenges that lie ahead.

Comprehensive Economic Partnership Agreement (CEPA)

The CEPA, signed in 2009, is a comprehensive bilateral trade agreement that covers trade in goods, services, and investments. It provides significant opportunities for Canadian businesses in sectors such as agriculture, education, and technology.

Under the CEPA, Canada has eliminated tariffs on over 90% of its non-agricultural exports to India, creating a level playing field for Canadian businesses to compete in the Indian market. Moreover, the agreement provides a framework for cooperation in areas such as intellectual property rights, e-commerce, and government procurement.

Despite the potential benefits of the CEPA, its implementation has been slow, and the trade deficit between the two countries remains high. According to a report by the Canadian government, the bilateral trade deficit with India was $2.3 billion in 2020, with Canadian exports to India declining by 37% since 2018.

Canada-India Joint Study Group on a Comprehensive Economic Partnership Agreement

In 2018, Canada and India agreed to establish a Joint Study Group (JSG) to explore the potential for a new, modern, and ambitious trade agreement. The JSG is expected to identify new opportunities in areas such as digital trade, services, and investment, while addressing the existing challenges faced by Canadian businesses operating in India.

The JSG report, released in 2020, recommended a Comprehensive Economic Partnership Agreement (CEPA) that would build on the existing agreement, with a focus on reducing non-tariff barriers, improving regulatory frameworks, and promoting trade in highly valued goods and services.

Impact of COVID-19 on Canada-India Trade

The COVID-19 pandemic has brought significant challenges for Canada-India trade. The temporary closure of borders, disruptions in global supply chains, and the shift towards digital trade have all impacted the trade between the two countries. According to the Canadian government, bilateral trade declined by 22% in 2020, with a sharp decline in exports of goods.

However, the pandemic has also created opportunities for Canadian businesses to explore new markets and diversify their supply chains. The shift towards digital trade has opened up new avenues for trade in services, such as e-commerce, telemedicine, and education.

Conclusion

In conclusion, the Canada-India trade relationship presents significant opportunities and challenges. While the existing trade agreement has provided a framework for cooperation, its implementation has been slow, and the trade deficit remains high. The establishment of the Joint Study Group on a Comprehensive Economic Partnership Agreement presents an opportunity to strengthen the bilateral trade relationship and explore new avenues for cooperation.

The COVID-19 pandemic has created new challenges for Canada-India trade, but also presented opportunities for Canadian businesses to explore new markets and diversify their supply chains. As both countries look towards post-pandemic economic recovery, strengthening their economic ties through bilateral trade agreements will be crucial for building a sustainable and prosperous future.


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