International Trade Committee

Honourable members of the House of Commons, thank you for giving me the opportunity to present my views on a subject that is important to both Canada and India.

I am Naval Bajaj, president of the Indo-Canada Chamber of Commerce. I am a small business owner and a business consultant.

Our chamber is a 35-year-old Canadian institution whose two objectives are to foster bilateral economic relations between Canada and India and to create business and professional opportunities for the Indian diaspora in Canada. We are the oldest Indo-Canadian business organization in Canada, and we are the largest Indian diaspora organization in Canada. We are a privately funded, non-partisan entity.

In pursuit of our objectives, we are supported by the Canadian private sector through sponsorship. As a chamber, we believe that Canada and India have political, social, and cultural commonalities that should automatically spur economic cooperation. Economic ties haven’t grown as rapidly as they ought to have, although, significantly, momentum has been activated in the last few years.

Closer economic relations between Canada and India will create opportunities for Canadian entities, not only in the Indian market, but through the Indian market, as these entities will be able to reach the rapidly expanding South Asian market. Similarly for Indian companies, access to the Canadian market can jump-start them into the much larger North American market.

In fact, during the last two years, our chamber has actively created a platform for interaction between our members and the Indian diaspora in Canada to interact with Don Stephenson, Canada’s chief negotiator of the CEPA with India. As a chamber we are convinced that the comprehensive economic partnership agreement between Canada and India will be immensely beneficial to businesses in both countries. It will kick-start economic relations and help in achieving the targeted $15-billion two-way trade between Canada and India. Our members have provided feedback about their concerns and gained knowledge on the opportunities that CEPA would create for them.

In India, too, we had a discussion in January 2012 with Mr. Anup Wadhawan, India’s chief negotiator on CEPA. We will have similar meetings in January 2013 during our chamber’s India trade mission. We will be taking over 50 Canadian small businesses to India to explore trade and business opportunities. The mayors of Markham and Brampton will be part of the Indo-Canada Chamber of Commerce’s delegation.

The CEPA negotiations focus on goods and services, and have reached a stage where both Canada and India have explained their positions to each other exhaustively. Now the process of agreement will begin.

CEPA is an agreement that comprises liberalization of trade in goods by cutting and/or eliminating tariffs on most or all goods on either side, besides easing of investment flows and special treatment to each other in such other areas as intellectual property rights. In all of these areas, there will be both opportunities and challenges. From a Canadian perspective, we understand the parameters within which the Indian establishment will operate in terms of granting of concessions. India may find it difficult to meet all Canadian demands for tariff reductions in view of domestic problems that may be created.

The same applies to foreign investment. It is indeed hard to comprehend the protracted delay on India’s part to finalize the foreign investment protection agreement, something that it has kept under wraps for the last eight years. As a chamber, our stand is that while Canada should, and does, take cognizance of the internal democratic dynamics with which India is governed, there has to be demonstrable political will on the part of the Indian establishment to commit itself to the path of liberalization and opening its financial sectors to Canadian entities.

In this regard, it might be a good strategy to adopt an incremental approach, whereby Canadian negotiators may agree to the common ground on the condition that India will be open for negotiations on the sticking points later on, when its internal situation may so warrant. Specific modalities, such as approach and level of commitments, should be discussed with Indians in the context of formal negotiations and their agreements sought to the maximum extent possible.

In terms of specific sectors, CEPA should include a chapter on telecommunications services, with the goal of promoting a pro-competitive regulatory environment that is vital to trade in telecommunications services, recognizing the mutual interest in facilitating the legitimate temporary movement of natural persons for enhancing bilateral trade and investment.

A separate chapter on temporary entry for natural persons should be included in the Canada-India CEPA. This would give a tremendous boost to the Canadian information technology sector by making it more competitive and more capable of competing in North America.

Internships and student exchange programs, people-to-people linkages, and arrangements for joint ventures or partnerships in third countries, such as in developing countries in Asia, Africa, and Latin America, may be considered for inclusion in CEPA.

The million-strong and growing Indian diaspora in Canada can, and wants to, play a significant role in developing economic relations. It will be useful if reference is made to the desirability of expanding people-to-people contacts and for making use of the Indian diaspora networks and resources, as its members know both the Canadian and Indian scenarios within which economic and commercial cooperation can best develop.

In this context, I want to emphasize that the Canadian establishment should take cognizance of the work that organizations such as ours are undertaking in this sphere. This is because governments may define the parameters of trade and extend boundaries of what can be done, but that alone is not enough. Finally, it is the entrepreneur who will put his money where his mouth is. Our chamber helps that entrepreneur take an informed decision on investing time, money, and expertise in a bilateral trade or investment deal.

In conclusion, I wish to state that economic partnership goes over and above trade and commerce. It is more than a mere enhancement in the trade of goods and services. Economic partnership includes all this and more. The important thing here is to define what we should include in the definition and to what extent.

In a world where geographical boundaries have become mere notions and where technological innovations are constantly creating economic opportunities, it has become imperative for governments to understand and adapt to these revolutionary changes. Canada and India have several political, cultural, and social commonalities. It is time now to create economic synergies, based on these commonalities, for the common good of its people.