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Canada-India Comprehensive Economic Partnership Agreement (CEPA) Negotiations: Possible Benefits for BC’s Agri-foods and Seafood SectorsNovember 2014Joshua A. Smith, Manager, Trade Policy and Negotiations Branch
Canada has implemented FTAs with these countries
Canada’s FTAs
Canada is in negotiation or exploration talks with these countries
• India’s economic growth has averaged more than six percent per year over the past decade.
• Projected to have the second largest GDP in the world by 2050.
• Within India's industrial corridor, 20 whole new cities are being built. Lots of mouths to feed and services to provide.
• India is a BC Jobs Plan priority market, along with China, South Korea, and Japan, and agri-foods is a priority sector.
• BC has Trade and Investment Representative offices in Bangalore, Mumbai and Chandigarh.
Why India?
BC Trade and Investment Reps
Mumbai India’s financial and business capital
> Investment attraction> Resources> Transportation> Film
ChandigarhCapital of the Punjab with strong cultural connections in BC
> Agrifood
> International Education
4
Chaitanya Patil
> Managing Director
Shukla Banerjee
> Digital Media & ICT
Nidhi Bhardwaj
> Life Sciences and Agri-foods
Agnel Worth
> International Education
Kavita Sharma
> Life Sciences and Transportation Manager
Shruti Patil
> Agrifoods, Program Assistant
Dawood Shakir
> Agrifoods, Clean tech, infrastructure
Madur Aggarwal
> Head, Investment, LNG and Mining
Satyesh Askulkar
> International Education
Trupti Khadye
> International Education, agri-food
Ananth Bhatt
> Clean technology and infrastructure
BangaloreIndia’s technology and innovation capital
> Technology (ICT, Life Sciences, Clean Tech> International Education> Research and Innovation
Isha Saraf
> Investment
BC and India
• India was BC’s sixth largest export destination in 2013.
• Despite $468 million in BC exports of goods to India in 2013, agri-foods and seafood exports accounted for only $2 million.
• Most of BC’s top exports to India have tariffs lower than five percent (e.g., various types of wood pulp, copper, and molybdenum).
• India still maintains high tariffs on other top BC export items including agricultural goods, some wood products, and clothing items.
• Agriculture is very important to India’s economy accounting for 17.4 percent of GDP and 50 percent of the workforce.
• Food security remains an issue. Between 40 to 60 percent of food rots before getting to market.
• In November 2010, Canada and India announced their agreement to launch negotiations for a Comprehensive Economic Partnership Agreement or CEPA.
• Joint Study: export gains from a CEPA for Canada could range from between 39% to 47%.
• Eight rounds of negotiations have taken place. Negotiators have resumed talks, although a formal ninth round has not yet been scheduled.
• Slow progress on many chapters, including goods chapter.
• The recent victory of Narendra Modi in the Indian General election may jumpstart these negotiations.
• BC strongly supports CEPA negotiations and hopes that a concluded deal will improve market access for goods and services, eliminate tariffs, and reduce non-tariff barriers.
• .
The CEPA: Background
CEPA: Challenges for Agrifoods/Seafood
• India maintains high tariffs on a number of agricultural lines including:o Various fruits etc. (30 percent)o Pacific Salmon (30 percent)o Green House Vegetables (30 percent)o Wine (150 percent)
• With agriculture being such a sensitive sector in India, most FTAs that India negotiates have longer phase out periods.
• India also maintains restrictive sanitary and phyto sanitary measures such as onerous fumigation and certification requirements.
• Need for Pest Risk Assessments (PRA) prevent some goods from entering the Indian market (e.g., Greenhouse vegetables).
• Number of other restrictions
CEPA: Possible Benefits
• Federal Government: 40,000 new jobs across the country or a $500 boost to the average Canadian family’s annual income.
• Exports could also increase between 39% to 47%.• Will benefit BC agri-foods and seafood producers
by eliminating Indian tariffs gradually and by enhancing cooperation mechanisms to address non-tariff barriers.
• Agriculture phase outs may take time (5 to 10 years have been the norm in India’s previous FTAs).
• Stronger SPS and Technical Barriers to Trade chapters may improve joint cooperation, information exchange, promotion of international standards, creation of committees etc.
.
CEPA: The Future
• Inter-sessional work continues between Canadian and Indian officials.
• Renewed sense of optimism since Modi’s election.
• Ninth round sometime in the near future.
• At recent events (e.g., Canada-India Business Council events) some commentators have urged a conclusion in the first two years of Modi’s mandate (or it may not get concluded).
• BC urges the conclusion of the CEPA: a less comprehensive agreement is better than no agreement.
