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India, Canada prepare road map for CEPA ahead of PM Narendra Modi’s visit |
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NEW DELHI: Ahead of Prime Minister Narendra Modi's visit to Canada next month, negotiators from the two sides have prepared a road map for a comprehensive bilateral free trade agreement between the two countries which could facilitate Indian textile and pharmaceutical products greater access to the Canadian market besides free movement for Indian professionals. The latest round of talks on a comprehensive economic partnership agreement (CEPA) held last week in Delhi after a gap of nearly two years saw Canada agreeing to put aside contentious issues related to services for later.
Canada, which has a high interest in financial services and telecom, was pushing for a deal to get advantage of all future policy liberalisation by removal of market access barriers, the so-called 'ratchet approach'. It also wanted to benefit from the bilateral services agreements signed by India in future. India had earlier sternly opposed these demands since they were beyond the WTO's General Agreement on Trade in Services (GATS), leading to a halt in talks last year.
"The two sides agreed to a road map to conclude CEPA as early as possible. Canada showed some flexibility this time, agreeing to keep the contentious demands related to services on the back-burner for the time being and discuss it, maybe at a later stage," a government official said, adding that the two sides exchanged areas of interests for both goods and services during the meeting. India will push for zero duty or tariff reduction for textiles, leather, pharmaceuticals etc, besides easier movement of Indian professionals from IT and ITES sectors. Canada is keen to get greater access for processed food, hydrocarbons related products, minerals, auto components and wine. The next round of talks has been tentatively scheduled for June.
The proposed agreement will look at various aspects including rules of origin, trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, and trade in services.
"The proposed CEPA will help ease a lot of regulatory and bureaucratic hurdles and help ramp up business ties between the two nations besides giving a boost to bilateral trade," said Rakesh Nangia, managing partner, Nangia & Co, an advisory firm specialising in international regulations. This is among the first FTAs being negotiated by the Modi government, which took over in May last year. EU-India free trade pact talks are also expected to restart in a few months. CEPA is aimed at cutting or eliminating duties on a large number of products traded between the countries, besides opening up the services sector and facilitating investment proposals. The negotiations were launched in 2010. The two sides had eight rounds of negotiations till 2013, with India seeking movement on services, before progressing on goods.
"Canada does not have a globally competitive manufacturing sector, but has strength in agro-processing, mineral processing, etc, which they would like India to open up for them. In services, it must be keen on construction services. In services India should look beyond Mode 4, movement of professionals and look at audio visual, education, research collaboration, etc," said Arpita Mukherjee, professor, Icrier. Canada has invested just $550 million in India in the last 15 years against over $3.5 billion by India in the North American nation.
Bilateral trade posted a 7.2% growth in 2013-14 over the previous year to reach $5.1 billion.
While India's exports were nearly flat, imports from Canada grew 12.43% during the fiscal, leaving a trade gap of $1.1 billion in Canada's favour. Prime Minister Modi is scheduled to visit Canada in the third and last leg of an eight-day tour beginning in France on April 9. Commerce and industry minister Nirmala Sitharaman met her Canadian counterpart Ed Fast in November last year.
Source : economictimes.indiatimes.com
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