Ng announces India trade mission, pledges a limited deal within months

OTTAWA — Trade Minister Mary Ng is expected to lead a trade mission to India this fall, and says it is “not going to be years” before Canada signs some form of trade agreement, more than a decade after negotiations began.

She made the comments at the end of a visit this week by Indian Commerce Minister Piyush Goyal, who Ng noted brought leaders of large Indian businesses to Ottawa and Toronto.

“Having India here … is a testament to our strong bilateral trade relationship and our commitment to keep doing this work,” Ng said.

Since March 2022, the two countries have been negotiating what’s called an Early Progress Trade Agreement, a deal restricted to certain industries instead of the entire economy. 

The talks follow a five-year hiatus, after both countries entered negotiations in 2010 for a comprehensive deal but abandoned the plans in 2017.

In a joint statement, Ng and Goyal said they seek “enhanced co-operation” in the fields of “agricultural goods, chemicals, green technologies, infrastructure, automotive, clean energy, electronics and minerals and metals.”

It’s unclear which of those fields would be part of an interim deal and which would be held off for later talks about a larger agreement, but Ng said she’s not worried about Canada getting stuck in the interim phase.

“This is a relationship that we are building, and that will endure, and that is very much a part of Canada’s Indo-Pacific strategy,” she said.

When asked whether getting the interim deal inked would take months or years, Ng said it was “not going to be years.”

She noted that since the formal launch of negotiations, there have been seven rounds of talks, and she said a deadline isn’t needed.

“If we continue at this pace, and make the continued progress that we both wish to see occur, then I think we will get there.”

Industry groups have been urging Canada to push for a deal to be signed this year, but a former Canadian envoy to India, Nadir Patel, said a deadline would likely make it harder for both sides to feel like they reached a fair agreement that they actually want to use.

“Putting timelines on something like this is not the most effective way at driving towards a conclusion. Because what trumps timelines really would be a desire on both sides to have a win-win agreement,” said Patel, a former trade negotiator.

“I’m cautiously optimistic that a deal can be concluded in relatively short order, but by no means is it a fait accompli.”

Patel noted that Goyal is a prominent minister in the government of Indian Prime Minister Narendra Modi, and he argued the visit can help get things back on track after the COVID-19 pandemic and elections put talks on pause.

“There was clearly a priority placed on forging closer trade, economic and by extension, bilateral ties, and I think that bodes well for Canada and India,” said Patel, a senior strategic adviser with Norton Rose Fulbright Canada.

He said the interim deal could lower tariffs in industries that neither side see as sensitive, as a low-hanging fruit that could stimulate more economic growth. 

It would also make it clear that the two countries can rely on each other amid a push by the U.S. to limit economic exposure to China by preferring partnerships with likeminded allies — a policy called friendshoring.

“Against the backdrop of friendshoring, concluding an early agreement sends a signal to business that Canada is a country that Indian companies can trade with.”

He noted that the Liberals seem to be doing the right thing by increasingly meeting in person, since doing business in India requires building relationships.

“The momentum is well on a strong trajectory,” Patel said.

Ng is scheduled to visit India in August for a G20 trade meeting, and Prime Minister Justin Trudeau is widely expected to go to New Delhi the next month for the G20 leaders’ summit.

In October, Ng said she’ll lead a “team Canada trade mission,” which generally means a visit of business heads and provincial officials. 

While leaks to media have suggested the interim trade deal was gummed up last fall on numerous fronts, Goyal told reporters Monday that teams have made “significant progress” in recent months. 

“Early completion of the Early Progress Agreement is something that will send a strong signal to the rest of the world about the strengthening relationship between these two countries,” he said.

Neither minister said which sticking points remain, though India has typically protected whole industries from foreign competition, while sudden regulatory changes on agricultural imports have riled up Canadian farmers.

This week’s joint statement also notes that New Delhi wants Canada’s top universities to set up campuses in India, and that the countries have relaunched a joint CEO forum.

Meanwhile, the NDP has urged Canada to be more vocal on concerns about India’s treatment of minorities. Human Rights Watch has called out Modi’s government for a “serious regression in human rights and constitutional protections,” and the NDP want a boycott of certain G20 events.

Ng said Canadians endeavour to raise “really important” values with their counterparts while still broadening commerce.

“I think that you could stand up for human rights and Canadian values and also pursue a trade relationship with a democracy,” she said.

“We are both countries who respect the rule of law, and we’re committed to the rules-based international order.”

This report by The Canadian Press was first published May 12, 2023.

Dylan Robertson, The Canadian Press