Key Takeaways
- Canada and India have agreed to work towards a comprehensive trade deal, known as a Comprehensive Economic Partnership Agreement (CEPA)
- The trade agreement aims to double bilateral trade to $70 billion by 2030
- The CEPA will include goods, services, investment, agriculture and agri-food, digital trade, labour mobility, and sustainable developments
- Trade talks between India and Canada were previously suspended due to allegations of Indian government involvement in the assassination of a Sikh activist
- The two countries have also announced a trilateral technology and innovation partnership with Australia, focusing on critical minerals, clean energy, and artificial intelligence
Introduction to the Trade Deal
Canada and India have revived efforts to establish a comprehensive trade deal, with Prime Minister Mark Carney and Indian Prime Minister Narendra Modi agreeing to begin negotiations on an "ambitious" Comprehensive Economic Partnership Agreement (CEPA). This development marks a significant step forward in the two countries’ trade relations, which have been ongoing for 15 years. The CEPA aims to double bilateral trade to $70 billion by 2030, and will include goods, services, investment, agriculture and agri-food, digital trade, labour mobility, and sustainable developments.
History of Trade Talks
The two countries first started talks on a comprehensive trade deal in 2010, but eventually downgraded their efforts to a deal that would only touch specific industries. However, trade talks were suspended in late 2023 after Canada went public with allegations that the Indian government was behind the assassination of Hardeep Singh Nijjar, a Sikh activist, near Vancouver in June 2023. The allegations were based on conversations intercepted by Canada and the United Kingdom, which implicated high-level Indian officials in Nijjar’s assassination. Despite these challenges, the two countries have now agreed to revive their trade talks and work towards a comprehensive trade deal.
Addressing Security Concerns
Prime Minister Carney acknowledged the "threat landscape" posed by India, but emphasized the importance of remaining vigilant and speaking out against any forms of foreign interference. He also sees India as a reliable trading partner, highlighting Canada’s strong commercial relationship with the country. Carney noted that Canada is one of the largest foreign investors in India, and that a trade agreement between the two countries would provide protections to businesses, clear rules, and dispute mechanisms. This would help to build on the existing opportunities and strengthen the trade relationship between Canada and India.
Trilateral Technology and Innovation Partnership
In addition to the comprehensive trade deal, Canada, India, and Australia have announced a trilateral technology and innovation partnership. This partnership aims to strengthen cooperation on critical minerals, clean energy, and artificial intelligence (AI). The partnership is seen as a significant development in the trade relations between the three countries, and is expected to have a positive impact on their economies. The partnership is also expected to enhance cooperation on civil nuclear energy, with Modi’s office noting that the two countries reaffirmed their civil nuclear cooperation and ongoing discussions on increasing collaboration.
Strengthening Diplomatic Ties
The two leaders have also agreed on regular reciprocal high-level visits, including by ministers and members of the business community. Carney’s office has pledged to increase diplomatic staffing levels to strengthen "people-to-people linkages" between Canada and India. This is seen as an important step in building stronger ties between the two countries, and is expected to have a positive impact on their trade relationship. The increased diplomatic presence is also expected to enhance cooperation on a range of issues, including trade, investment, and innovation.
Conclusion
In conclusion, the agreement between Canada and India to work towards a comprehensive trade deal is a significant development in their trade relations. The CEPA aims to double bilateral trade to $70 billion by 2030, and will include a range of sectors, including goods, services, investment, agriculture and agri-food, digital trade, labour mobility, and sustainable developments. Despite the challenges posed by security concerns, the two countries have agreed to revive their trade talks and work towards a comprehensive trade deal. The trilateral technology and innovation partnership with Australia is also seen as a significant development, and is expected to have a positive impact on the economies of the three countries. Overall, the agreement between Canada and India is a positive step forward in their trade relations, and is expected to have a significant impact on their economies.
