Thank you kindly, Mr. Chair.
It is my pleasure to be here today to speak on the topic of the Canada-India Comprehensive Economic Partnership Agreement, or CEPA, negotiations.
With me from the Department of Foreign Affairs and International Trade are Luc Santerre, Director of South Asia Commercial Relations, Catherine Gosselin, Deputy Chief Negotiator for the CEPA negotiations, and Shendra Melia, Deputy Director of the Services Trade Policy Division.
As the committee will no doubt recall, we discussed the CEPA negotiations almost a year ago on December 1, 2011. Since that time, the negotiations have been progressing well through the initial stages. Four rounds of negotiations have been held, and we will soon move towards the next and more intensive stage of the negotiations.
The decision to pursue the CEPA negotiations with India is a key part of Canada's broader strategy of engagement with this increasingly important country. As Prime Minister Harper stated during his recent state visit to India, our government is committed to promoting greater trade and investment with India. India is a growing economy with enormous potential, and expanding our trade and investment links with India will create jobs, growth, and long-term prosperity here in Canada.
The visit of November 4 to 9 was Prime Minister Harper's second official visit to India. Prime Minister Harper was accompanied by a high-level delegation comprising three ministers, including the Honourable Ed Fast, Minister of International Trade, five members of Parliament, two senators, senior officials, and business persons. In addition to New Delhi, the Prime Minister visited Agra, Chandigarh, and Bangalore.
Prime Minister Harper and Prime Minister Singh held detailed discussions on bilateral issues and on regional and international issues of mutual interest. Most notably, the prime ministers announced the conclusion of negotiations for the administrative arrangement between Canada and India that will allow the implementation of the nuclear cooperation agreement between the two countries that was signed in June 2010. They witnessed the signing of the Canada-India Social Security Agreement, which will enable Canada and India to better coordinate the pension provisions and contributions of their citizens who have worked in both countries. They also commended the convening of the first meeting of the India-Canada CEO Forum.
Furthermore, Prime Minister Harper announced the winner of the Canada-India Research Centre of Excellence competition, and Minister Fast welcomed the announcement of commercial agreements worth more than $2.5 billion. The two leaders also noted that bilateral trade at its current level does not reflect the true potential of the commercial relationship and reiterated their shared desire to see bilateral trade reach $15 billion by 2015.
In 2011, two-way foreign direct investment reached $5 billion, and bilateral merchandise trade reached $5.2 billion, an increase of 23.4% from 2010. As Minister Fast remarked:
Canada's growing trade with India is fuelled by our strong people-to-people ties. India is a growing economy with enormous potential, and our government is committed to further strengthening the links between our two countries.
The CEPA negotiations have an important role to play in reaching this potential.
The committee will recall that in November 2009 Prime Ministers Harper and Singh announced the formation of a joint study group to examine the feasibility and benefits of a comprehensive economic partnership agreement. The joint study was publicly released in September 2010 and concluded that free trade could boost the economies of both Canada and lndia by at least $6 billion, increase bilateral trade by 50%, and directly benefit a variety of Canadian sectors, which we discussed in more detail last year.
Let me now provide some context to the CEPA negotiations, an update on where we are in the talks, and what we expect in the coming months.
Canada, as you know, is pursuing an evermore ambitious array of trade negotiations with partners around the world.
Since 2006, Canada has concluded free trade agreements with nine countries: Colombia, Honduras, Jordan, Panama, Peru and the European Free Trade Association member states of Iceland, Liechtenstein, Norway and Switzerland. In addition, Canada is pursuing many other negotiations including with the European Union, Japan and Korea. Exploratory talks have also been launched with Thailand, and more recently, Canada joined the Trans-Pacific Partnership talks.
As part of Economic Action Plan 2012, the government committed to updating the 2007 Global Commerce Strategy to align Canada's trade and investment objectives in specific high-growth and strategic priority markets. Canada's pro-trade agenda is also driven by the need to ensure that Canadian workers and companies can compete on a level playing field with their foreign competition.
India has already negotiated several trade agreements, including with Chile, ASEAN, Korea and most recently Japan. India is also currently negotiating with New Zealand, Australia and the European Union, and the queue is likely to continue to grow in the coming years.
So where do negotiations stand today?
Following the release of the joint study, the prime ministers of Canada and India formally announced the start of the CEPA negotiations in November 2010. Six rounds of negotiations have been held to date, four of them since we last met, in December 2011. The third, fourth and fifth rounds were held in December 2011, February 2012 and July 2012, all in New Delhi. Most recently, the sixth round was held November 15 to 17, here in Ottawa.
India typically conducts its trade negotiations with a very small team. As a result, rounds with India are shorter and more focussed than is Canada's usual model.
In terms of structure, seven negotiating tables have been established covering the key areas of the agreement. These are goods, technical barriers to trade, sanitary and phytosanitary measures, origin procedures, customs and trade facilitation, institutional issues, and services. That includes cross-border trade in services, temporary entry, financial services, and telecommunication services. We have also agreed that other areas as identified in the joint study may be discussed in future rounds.
Following a productive sixth round, at which most areas were discussed, the first stage of the negotiations is coming to a close. We have exchanged information on approach, trade data, tariff information, and model text. Progress has been made towards consolidating text in a number of areas. We have different approaches in some areas of the negotiations, and the sixth round provided an opportunity to address some of these issues. We plan to further these discussions intersessionally.
We are starting to move toward the next stage of the negotiations that will involve the exchange of first offers in goods and services. During the round, my counterpart and I discussed how we can intensify the negotiations and lay down a road map of next steps through to the conclusion of the negotiations.
The negotiations with India are a high priority, and our target remains to complete negotiations by the end of 2013, further formalized during Prime Minister Harper's visit to India, as the two prime ministers welcomed the progress being made in the negotiations and reaffirmed their desire to conclude in 2013.
Based on consultations to date, the CEPA negotiations enjoy broad-based support from stakeholders in Canada, including the provinces and territories. We will continue to consult with and seek advice from stakeholders as we proceed.
Our aim is to move forward with ambition to ensure a forward-looking agreement that captures our current trade today and facilitates the Canada-India economic relationship into the future.
In conclusion, Mr. Chair, the government is committed to deepening Canada's trade and investment ties with India, as shown by Prime Minister Harper's visit to India.
Canada has an ambitious trade negotiations agenda, and the CEPA is a key element of that.
I thank you for the opportunity to address the committee members. My team and I look forward to hearing your views, which will inform our negotiations. We would be pleased to answer your questions.