The federal government’s aggressive agricultural trade agenda is paying dividends with a sharp increase in the value of exports this year, says agriculture minister Gerry Ritz.
“I’m proud to report that Canada’s agricultural exports have risen by eight percent this year alone,” he told MPs on the House of Commons agriculture committee Nov. 18.
“This is tremendous news for our front line farmers. Step by step, market by market, this government is opening up new markets for our farmers and exporters.”
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Last week also marked the next phase in that agenda as trade minister Peter Van Loan announced the launch of free trade talks with India.
In a conference call from New Delhi, the minister said the two countries have set a goal of increasing two way trade from $4 billion to $6 to $15 billion over five years.
A key Canadian goal is to negotiate greater co-operation between the two countries’ regulatory agencies and clarify the rules on when sanitary and phytosanitary rules can be invoked to impede imports.
Canadian negotiators will also try to lower Indian tariffs on agricultural imports that average more than 30 percent.
Despite those tariffs, Canada shipped more than $400 million worth of agricultural products to India in 2008, most of it pulse crops, according to a joint study produced by officials from the two countries.
Agriculture and food products were the second largest item in the $2 billion worth of Canadian exports.
The joint study said the Canada-India trade relationship drastically needs expansion.
Bilateral trade with Canada ranked 30th on the list of countries that trade with India, the world’s second largest country with 1.2 billion people.
“It appears that the India-Canada trade relationship is significantly under-traded,” the study said.
“For example, total trade between India and Canada is three times smaller than the size of trade between India and Australia, even though the Canadian economy is about 50 percent larger than that of Australia.”
Van Loan said it was too early to predict how long talks would last, but Canada hopes for a “deep and broad” agreement in as short a time as possible.
“It’s too early to put a completion date on it,” he told reporters from the Indian capital.
“But I see from the Indian side a very, very firm commitment to move ahead quickly.”
Kathleen Sullivan, executive director of the Canadian Agri-Food Trade Alliance, said her members do not expect a quick completion of talks.
“We’re not expecting this negotiation will move nearly as quickly as the European Union talks,” she said.
Canada-EU talks started last year and are slated to wrap up next year.
Still, she said many of C AFTA’s export-oriented members see potential in a deal with India.
“I think it’s fair to say that while we don’t expect anything quickly, our members in the beef and pork, grains and oilseeds side see some real potential for new markets because it is such a big and expanding market,” she said.
The big winner could be the pulse industry, which already considers India a key market with considerable potential to grow.
Canada, India report
In September 2008, the Canadian Council of Chief Executives and the Confederation of Indian Industry issued a joint report called India and Canada: A New Era of Co-operation, whichmade recommendations on how to improve the trade relationship between Canada and India.
•Canadian economic modelling undertaken for the study estimated gross domestic product gains of 0.4 percent for Canada and 0.5 percent for India, which amount to about $6 billion at current gross domestic product levels for each country.
•India’s modelling exercise, based on different assumptions, produced larger gains (one percent of gross domestic product, or $12 billion for India and $15 billion for Canada).
•Canadian modelling also showed gains in bilateral trade, for Canada as high as 47 percent and for India as high as 60 percent.
•Canada’s gains in exports to India would be spread across sectors, ranging from agricultural and resources-related products to chemical products, transport equipment, machinery and equipment and services.
•India’s leading gains in exports to Canada would be concentrated in textile and apparel products and services.
•India is projected to be the world’s third largest economy by 2050. Its growing population, rising per capita income level, and expanding manufacturing, technology and service sectors, could present a tremendous market for Canadian companies, according to the Canadian government.
Source: Government of Canada
