New Delhi: Canadian companies have traditionally been reliant on the US, their next-door neighbour, for business. With the US battling turmoil in its financial industry that has given way to recession, Canada is looking for new trade frontiers. In an interview, Canada’s visiting minister for international trade Stockwell Day talks about the start of discussions with India towards a Free Trade Agreement and possible cooperation in civilian nuclear energy. Edited excerpts:
How does Canada view India from the bilateral trade perspective and what are the new areas of cooperation that you see?
We have a great historical relationship. We share a common parliamentary history. We have great admiration for the robust democracy that India has established. There is a very significant Indo-Canadian community in Canada that accounts for a good portion of our GDP (gross domestic product) and successful businesses. We see a great opportunity for closer trade...I had productive discussions with the (commerce) minister (Kamal Nath) on pursuing an agreement relating to trade.
Good stride: Canada’s minister for international trade Stockwell Day. B Mathur/Reuters
So you see the possibility of signing a Free Trade Agreement with India
I hope for that possibility. We had very good discussion between Mr Nath and myself and my officials. We have agreed that now is the time to instruct our officials to begin that discussion. As you know there are scoping exercises that have to be done to look at the breadth of that agreement.
You met Prime Minister Manmohan Singh on Monday. What was the focus of your discussion?
Yes, I met Mr Nath, the Prime Minister and the national security adviser. We discussed the key areas of free trade discussion and getting our agreement to move ahead. Officials of both sides have discussed how it would look like. We also talked about our foreign investment protection and promotion agreement. We have made some very good strides there. That should be concluded very soon. Then we have a great opportunity in clean nuclear energy. Canada is a world leader in that aspect. We also covered a variety of areas including financial services and technology.
How do you see the current economic crisis affecting international trade? Will there be more trade walls now and more protectionism?
That’s the danger. What I am encouraged (by as a result of) our attempts in the global fora (is that) we find the voices are almost unanimous in saying that we have to resist the protectionist impulse.
And in the current scenario, what are the possibilities of a revival of the Doha Round of trade talks?
I was disappointed the way things slowed down. We are calling it a pause, nobody has abandoned it. There was some thought that the new administration in the United States will come into play, that probably is timely... Globally we need some signals, some positive signs, that progress is being made and Doha continues.
Do you think developed countries should cut down their subsidies towards the farm sector?
Yes, in all free trade agreements we have entered in, we expect reduction in tariffs, reduction in subsidies. It is rarely 100% across the board at the start; we must move towards that.
Some businessmen of civilian nuclear companies from Canada are visiting with you. What is the size of business opportunity you see in this area in India?
The fact that India has indicated they want to develop as many as 25 or 30 more facilities, there is great opportunity for Canada which is a leader in the area of efficient nuclear energy and we are facilitating meetings with our private sector companies to make that happen. The government here is very open for that discussion. India is taking a very responsible approach to clean, environmentally safe (nuclear) energy. We have those companies with me here and (we are) getting the message through that we have great mutual opportunities.
Though India has been growing for about 9% in the last four years, there is a feeling in some quarters that there is lack of enthusiasm from Canadian companies to invest in India. What could be the reason?
There is no lack of enthusiasm, what is there is huge traction for Canadian companies in doing business with the United States because they are a huge economic engine and they are just next door. The very efficiencies and cost reductions of transportation mitigates against companies automatically looking abroad. But when we get the kind of signals we do from India that they are open to rule-based free trade, when we see that the problem in the United States means they have a reduced ability to purchase consumer goods and services...(that) will alert the business sector and the government (in Canada) towards opportunities in India.
Canada had a formal policy of not engaging with the government of Gujarat. Are you contemplating any review in that policy? (The previous Canadian government shunned Gujarat after the 2002 riots.)
I can’t speak for the previous government why they were negligent in recognizing the opportunity there, but I can give you a bit of scoop here by saying that I will soon be announcing a (trade) office in Gujarat to recognize the tremendous potential there.