'India, Canada should improve economic cooperation'

By Our Special Correspondent

CHENNAI, MARCH 20. India and Canada, which are mutually the 24th to 26th largest trading partners of each other, should aim at improving their rank to within the first ten in the next few years, the Canadian Deputy Minister for International Trade, Mr. Rob Wright, said here today.

Citing the announcement made by the Canadian Foreign Minister, Mr. John Manley, about the lifting of all restrictions on development assistance which Canada had imposed on India in the wake of Pokhran-II, Mr. Wright said India was a ``top priority'' for Canada in view of the size of its economy, and its economic prospects and it being a source of strategic imports.

Mr. Wright, who addressed a meeting organised by the Confederation of Indian Industry-Southern Region (CII-SR), said the present volume of bilateral trade, at less than $2 billion, was too small compared to India's own foreign trade of $70 billion and that of Canada exceeding $260 billion. Both countries had to think of ways of realising their full potential for cooperation. India, he pointed out, had emerged as the 11th largest economy in the world from the position of 16th five years ago, while it ranked fourth in terms of purchasing power parity.

India's exports to Canada in 1999 at $1.2 billion, were far higher than Canadian exports to India, which totalled $500 million. However, the bilateral trade had recorded significant improvement in recent years.

The Minister emphasised the stake both countries had in expanding more open trade under the auspices of the World Trade Organisation (WTO). With one-third of its employment being directly or indirectly dependent on foreign trade and with wages in this sector being 35 per cent higher than elsewhere, Canada's stakes in foreign trade were bigger than in the case of the U.S., Japan and India. Canada could sustain its economy by ``fully buying into the WTO'', which India too should do if it were to use international trade for economic growth, Mr. Wright said.

Both countries, he pointed out, had commonality in being major trading countries and having an interest in a rule-based international trading system. He was hopeful that both India and China would have a ``leadership role in rule-making'' in the WTO in view of the importance of their economies in global trade.

He felt that the slowdown in the U.S. economy would not have a major impact on Canada, which had registered 3 per cent economic growth and inflation of just 2 per cent. The recovery in oil and gas prices too would strengthen its balance of payments.

Mr. Wright suggested to Indian industrialists to use the access provided by Canada to the U.S. and Mexican markets under the North American Free Trade Agreement (NAFTA) by undertaking manufacturing within Canada (with a minimum value addition of 50 per cent). Several Indian software companies had set up shop in Canada, taking advantage of lower costs there compared to the U.S., he pointed out.

Referring to the growing collaboration between the film industries of the two countries, Mr. Wright said the proposed resumption of direct air services by Air Canada from October this year would facilitate economic cooperation. It would be his endeavour to expedite issue of visas to Indian businessmen so as to become ``competitive'' in this service vis-a-vis the U.S. and Britain. He was also keen that the strength of the Consulate of Canada in Chennai should be augmented.

Ms. Yasmin Ahmed, Chairman and Managing Director, SIPCOT (State Industries Promotion Corporation of Tamil Nadu), made a presentation on various industrial parks being promoted by it and which were available for occupation by domestic and foreign investors.

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Section  : Business
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