Evidence of meeting #56 for International Trade in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was areas.
A recording is available from Parliament.
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
I assure you that I speak on behalf of that potato.
Conservative
Ed Holder Conservative London West, ON
Perfect.
Now, what concerns me is that in the various free trade deals that we've talked about, from South America to Europe to the Middle East and to other places, much has been discussed about how we can help assist these countries. By the way, I think that's honourable. To the extent that we can raise standards of living and create benefits to other countries, I think that's great.
But frankly, I'm particularly interested in Canada's benefit. What's not quite as clear to me is the tariff regime in India that these various Canadian industries have to deal with. Can you give us some sense, based on your negotiations—six rounds, I understand now, so you have some feel for this, I'm speculating—as to what tariff benefits Canadian businesses will see as a result of your negotiations, the successful ones?
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
First of all, I would like to say that the average tariff faced by a Canadian export into India is something in the range of 9%, but on manufactured goods, that's in the range of 5% to 10%, and in agricultural goods the average is 30%. That's an average. Some tariffs are very significantly higher.
We would expect in these negotiations to dramatically reduce those tariffs, and I mean something like 90% of tariffs, say, either going to 0% or at least having a significant reduction. That would be a reasonable target. Typically, and particularly in a negotiation with a developing country, one would see an implementation period being provided, a transition period, that would likely be longer for the developing country than the developed. That would be a standard kind of arrangement in a negotiation between a developed and developing country. That gives you some idea of the parameters.
Now, I should point out that India is sensitive in agriculture. That's why the tariffs are higher. And they're sensitive in agriculture for a number of sensible reason. Fifty-two per cent of the workforce in India still relies on agriculture. In Canada, which is perhaps the fourth- or fifth-largest exporter of agricultural products in the world, it's 2%.
So that's an awful lot of people. That used to be much higher in India. The transition to the cities and to manufacturing jobs and services jobs is happening, but it has to be managed, so they are very sensitive. These are also poor farmers. This is not farming in the the way a Canadian thinks about farming. This is subsistence farming, in very large measure, so they're extremely sensitive to price fluctuations, to market prices, and to the cost of inputs. India has to manage their agricultural trade very carefully.
Conservative
Ed Holder Conservative London West, ON
Might I add that all of my questions were within the five-minute period? It's just that some of the answers went beyond.
Conservative
The Chair Conservative Rob Merrifield
Yes, and I know exactly what it was.
Thank you.
Monsieur Morin.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Mr. Stephenson, before starting negotiations, you built economic models and projections on the trade potential.
Would you be able to provide us with those models to give us an idea of the potential we're talking about? Do you have documentation to submit to the committee?
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
The joint study carried out with India is available on the department's Web site. It includes the two countries' projections, or economic models, in a report. So they are available to you.
In fact, I thought the committee had asked us to provide copies of the report when we appeared last December.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
I have another question that might be a bit more explosive than potatoes.
Earlier, you mentioned the nuclear cooperation agreement. I know that, for decades, Canada's position was to bring a lot of pressure to bear on the successive Indian governments. They didn't like being told that they couldn't be regarded as a nuclear power. In their view, that status is perfectly legitimate given that nuclear powers like Pakistan and China surround them.
We're not talking about a very calm region, where the potential for conflict is non-existent. And there are very serious reasons for that. These countries aren't surrounded by democracies. So the potential for conflict is tremendous.
Canada has always sought to prevent nuclear proliferation. I would like to know, then, how that matter between Canada and India was resolved.
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
I will ask my colleague Mr. Santerre to answer that.
Director, South, Southeast Asia and Oceania Commercial Relations, Department of Foreign Affairs and International Trade
Canada and India reached a nuclear cooperation agreement extending solely to civil matters, in June 2010 while the G20 Summit was happening in Toronto. On the sidelines of the summit, Prime Minister Singh came to Canada on an official visit. The nuclear cooperation agreement signed by the two countries extends solely to the civil domain.
When Prime Minister Harper visited India at the beginning of the month, negotiators had concluded an underlying agreement to operationalize the civil nuclear cooperation agreement. It's an administrative agreement laying out all the details. It provides for the reporting mechanisms on both sides as regards the sharing of civil nuclear expertise, materials and technology. These mechanisms are designed to preserve the integrity of both countries' interests in nuclear non-proliferation.
NDP
Director, South, Southeast Asia and Oceania Commercial Relations, Department of Foreign Affairs and International Trade
I don't have the mechanisms with me, but everything is fully compliant with the non-proliferation policy Canada has maintained for the past 30 years.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Was it the result of pure goodwill on both sides, or did compromises have to be made? Did Canada have to give up a certain degree of control over the materials exported to India? Or did India just agree to Canadian oversight and supervision to ensure that—
Director, South, Southeast Asia and Oceania Commercial Relations, Department of Foreign Affairs and International Trade
I'm not an expert on that agreement. So I wouldn't want to venture an inadequate answer to your very specific question. What I can tell you is that the integrity of our non-proliferation policy remained perfectly intact on both sides, because India also has such a policy in place.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Thank you, Mr. Chair.
To you and your team, Mr. Stephenson, thank you very much for coming here again this afternoon.
Following up on some witnesses we had previously who talked about the different culture and different way of doing business and building relationships, one of the factors they felt—the Canada India Foundation, and the Asia Pacific Foundation of Canada, etc.—is the lack of desire or I guess energy from the Indian perspective to get engaged in the process. What's your strategy to get them a little more motivated to move this process in a more timely manner so we can move forward as expeditiously as possible?
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
Well, as was commented on already, I would agree with the assertion that India needs Canada in respect of meeting many of its development objectives, including the list that I provided: food security, energy security, infrastructure, and education. That having been said, India has a lot of suitors. A lot of countries—north, south, east, and west—are trying to put themselves in a position to enjoy the explosive growth of the Indian market.
How does Canada distinguish itself in that crowd? In particular, how do we motivate an ambitious outcome in our negotiations? Clearly, one of the things we're going to have to do, and plan to do, in the negotiations is respond to India's interests and needs in the negotiation in a fair exchange, in a reciprocal deal. It's the substance of what's on the table that will drive the interest on the Indian side. That would be my suggestion.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
I come from British Columbia as well and represent Kelowna—Lake Country in the Okanagan, where there is a large and growing Indian community that is very intelligent, especially in the high tech area. I'm wondering what we're doing as far as the negotiations for intellectual property are concerned. Have they signed on to WIPO, and for international copyright, ACTRA, and the different international legislation that is in place?
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
In my remarks, I indicated there were some areas and issues that were not yet part of the agreed content of the final agreement—the modalities, as we call them. Intellectual property is one of those areas. Canada continues to promote the idea of including intellectual property protection in the agreement, but this is not yet agreed on the Indian side. That issue and all others, I suppose, are still in negotiation, and the outcome is difficult to predict.
In the meantime, the Indians are members of the WTO, where there are provisions on the protection of intellectual property, and they are members of WIPO.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
You said they've signed other bilateral agreements. What's the status with the U.S. in negotiations?
Chief Trade Negotiator, Canada-India Comprehensive Economic Partnership Agreement, Department of Foreign Affairs and International Trade
They are not in negotiation with the U.S. They are in the fifth year of negotiations with the European Union.
Conservative
Ron Cannan Conservative Kelowna—Lake Country, BC
Okay.
On mining, Canada is a leader in the mining industry. What are the opportunities for Canadian mining companies getting into the mining industry in India?
Shendra Melia Deputy Director, Services Trade Policy, Department of Foreign Affairs and International Trade
Mining services is one of the areas that we identified in the joint study as an area of potential export interest to Canada, an area where we felt gains could be made.
Also, for energy more generally as well, a number of our small and medium-sized enterprises are very aggressively trying to enter the Indian market for renewable energy. Electricity is another one of those areas, in transmission, distribution, and generation. Again, there's tremendous potential there. That's one of the areas in which we would be seeking to get India to make further commitments for us in the market access offers when we get to that stage of the negotiations.