Ahead of the much anticipated G20 Summit, Canada has abruptly paused trade talks with India. According to a report by the Financial Post, the trade negotiations were halted last month upon the request of Canadian Prime Minister Justin Trudeau’s led government.
Notably, both India and Canada have been negotiating a trade deal since 2010 when the Congress government was in power. However, the abrupt decision from Ottawa came at a time when the relations between the two nations were strained following the rise of the Khalistani movement in Canada.
According to Canadian Press, India’s high commissioner to Canada Sanjay Kumar Verma confirmed that Trudeau’s faction initiated the pause.
“The Canadian side has suggested a ‘pause’ to the ongoing fast-paced negotiations on an early-progress trade agreement with India,” FP quoted Verma as saying in an emailed statement. “Though I am not aware of exact reason(s), most likely, the ‘pause’ will allow more consultations with the stakeholders,” he added.
No clarity over bilateral talks between India and Canada
It is worth mentioning Indian Minister for Commerce and Industry, Piyush Goyal had visited Canada in May this year where he met with his Canadian counterpart Mary Ng. During the meeting, both sides appeared optimistic. In fact, Ng had claimed that both countries were getting closer to signing the agreement.
Notably, the Canadian PM is scheduled to visit New Delhi for the upcoming Summit in Delhi this month. However, it is not clear whether he will meet his Indian counterpart Narendra Modi on the sidelines of the mega event.
India-Canada Comprehensive Economic Partnership Agreement (CEPA)
In September 2008, the India-Canada CEO Round Table recommended that India and Canada would benefit enormously from CEPA by eliminating tariffs on a substantial majority of the bilateral trade. CEPA would cover trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade and other areas of economic cooperation.
According to the Commerce Ministry, a Joint Study was conducted and the report came in September 2010 strongly recommending the benefits of CEPA for both countries.
Accordingly, the announcement of the launch of India-Canada CEPA negotiations was made by the PMs of both the countries in Seoul in November 2010 and the negotiations were formally launched by CITM and Canadian Trade Minister Van Loan on 16 November 2010 in New Delhi.
The 10th Round was held in New Delhi in August 2017.
A stocktaking CEPA and FIPA virtual bilateral meeting was held on 22nd June 2020 between the Chief Negotiators of both sides. Subsequently, on 27th October 2020 a bilateral meeting was held to explore the option of an early harvest / interim agreement. In this regard, scoping paper has been shared with the Canadian side, and on 19th November 2020 a DVC was held and both sides are engaged to take it forward.