Canada, India plan trade agreement
Reuters: January 20, 2009http://www.theglobeandmail.com/servlet/story/RTGAM.20090120.windiacanadaenergy0120/EmailBNStory/energy/
NEW DELHI Canada plans to sign a free trade agreement with India and help New Delhi expand its civil nuclear energy sector, its trade minister said on Tuesday.
Canadian firms including federally owned Atomic Energy of Canada Ltd., Cameco Corp. and SNC-Lavalin are eager to forge joint ventures or work with Indian firms to help build billion-dollar nuclear reactors and supply uranium, Stockwell Day told Reuters in an interview.
A major uranium producer, Canada lifted a ban on trade in nuclear products with India after New Delhi signed a landmark civil nuclear deal with the United States last year.
India has defined the need for maybe 25-30 reactors and we can be part of this plan, Mr. Day said.
India, which industry bodies say will need investment of about $150 billion over the next 15 years to help it bridge a power shortfall, has seen a rush of global companies on its shores since the U.S. deal was signed, ending 30 years of nuclear isolation.
Mr. Day, who has met senior government officials, including Trade Minister Kamal Nath and the prime minister, said his country wished to sign pacts to boost trade and investment amid the global downturn.
We want to open up a wider trading relationship with India ... In my meeting with Minister Nath, we have agreed now to instruct our officials to begin discussions on working towards a free trade agreement, Day said.
Two-way trade between Canada and India stood at $3.8-billion in 2007, and the minister said there could be some shrinkage in 2008 due to the global financial crisis and slumping economies.
According to a World Bank estimate, global trade could shrink in 2009, for the first time since 1982, as countries try to protect their domestic industry in times of gloom.
Mr. Day said Canada would keep in mind the sensitivities of India while framing the free trade pact, referring to a wide range of farm products that New Delhi may keep off the table to protect local farmers.
In a classic Free Trade Agreement, what you try to do is to move towards reduction of subsidies and end of tariffs. But each country has certain sensitivities also, he said.
Asked if the trade pact could be concluded this year, Mr. Day said: Possible but difficult. It's going to take months.
The minister said Canada would like to sign a Foreign Investment Protection Agreement with India by the end of this year.
Foreign investment flows from Canada into India stood at $207-million in 2007, while Indian companies have invested $446-million in Canada in the same year.