Prime Minister Justin Trudeau heads to India this Friday for a week-long trip that, much like his recent stops in China and Vietnam, is expected to focus heavily on trade.
Canadian officials have been laying the groundwork for a free-trade agreement with the world’s second-most populous country since long before Trudeau was elected, kicking off talks back in 2010 under Stephen Harper.
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But experts suggest that the current prime minister’s “comprehensive and progressive” approach to trade could present fresh challenges in India — much as it has in China and, to a certain extent, with partners in the Trans-Pacific Partnership trade agreement.
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“Comprehensive and progressive would be nice to have, but it would be difficult in the context of a China agreement, and I think also India, to include the full range of issues that we would like to see,” said Stewart Beck, Canada’s former High Commissioner to India who now serves as CEO of the Asia Pacific Foundation of Canada.
“It’s not something that they would understand. They see trade as trade, and adding and layering in other elements to that would be difficult, and it would take some time.”
The Liberal government has made no secret of its desire to see things like more stringent labour standards, gender-equality provisions and environmental regulations folded into its future trade pacts.
According to Beck, while India could present an extremely lucrative market, it’s also “at a completely different level of development than Canada” in all these domains. The rights of women and girls, in particular, are a central concern for humanitarian organizations.
“Historically, when we had an aid relationship with India, we were working hard on trying to bring those elements up in society,” he noted. “India has progressed a long way since 2006 … but it’s still not a level you would see in a western democracy or a developed economy. So it’s a challenge, and it’s a work in progress.”
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Vivek Dehejia, an associate professor at Carleton University who is also a fellow at the IDFC Institute think-tank in Mumbai, said there is also a danger that Canada will be perceived as “lecturing” India and its prime minister, Narendra Modi.
“Quite frankly, India being a thriving democracy — it has its failings as we do in Canada — doesn’t particularly like to be lectured on social issues, women’s issues,” Dehejia said.
“It would be a bit like Mr. Modi talking about problems of First Nations in Canada. If he did that, I wonder how folks here would react to that.”
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Harry Sharma, manager at the Canada-India Centre for Excellence at Carleton University, was more optimistic, but acknowledged that priorities in the two nations don’t always line up.
India, he pointed out, remains heavily focused on easing the movement of its workers to Canada. That is the top priority. But Modi recently made a strong case in Davos, Switzerland for an increase in global trade in general, so “it’s not like we’re moving in opposite directions.”
“The Indian population in general is very, very pro-global trade,” Sharma said.
‘Tremendous’ opportunity
If and when it does materialize, a formal bilateral trade pact — possibly accompanied by a foreign investment protection agreement (FIPA) — would present significant economic opportunities for Canada.
In 2016, merchandise trade between the two nations was valued at only $8 billion, and bilateral trade in services sat at $2.1 billion.
Last fall, the Trudeau government cemented its commitment to securing a deal by sending a huge delegation to the country that included International Trade Minister François-Philippe Champagne, Innovation Minister Navdeep Bains, and Transport Minister Marc Garneau — not to mention 120 representatives from more than 85 Canadian companies.
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As Trudeau’s trip looms, however, there are not many hints that an agreement is imminent. The prime minister is expected to make stops in Agra, Amritsar, Ahmedabad, Mumbai and New Delhi, and is set to participate in several business roundtables during his trip.
“I think they’re progressing at the pace that they both feel comfortable with,” said Sharma of the current status of the talks. “I do believe that this trip will help overcome some of the impediments that have slowed progress down.”
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According to Dehejia, a resolution is unlikely before Trudeau jets back to Canada on Feb. 23.
“One of the trade negotiators who was working on this file joked to me once that he’s grown bald working on this over the years,” he said, laughing.
“I don’t think either country is the other country’s top priority.”
-With files from Abigail Bimman
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