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Canada-India Joint Study Group Report: Exploring the Feasibility of a Comprehensive Economic Partnership Agreement

Chapter 7: Recommendations and Conclusion

Further to an announcement by Canada's Minister of International Trade and India's Minister of Commerce and Industry on January 21, 2009, a Joint Study Group was established on November 17, 2010 to examine the feasibility of a CEPA with the following objectives:

The Joint Study Group also undertook economic modelling with a view to identifying the possible economic impact of trade liberalisation. Simulations using the GTAP were carried out by both Canada and India. The simulations covered a wide range of liberalisation issues such as trade in goods and services and trade facilitation, and they examined the implications of productivity gains and increases in the supply of labour and capital, and their consequent impact on the economies of the contracting parties. Estimates of GDP gains range from US$6-15 billion for Canada and US$6-12 billion for India. These results show that the potential gains from liberalising trade between Canada and India are substantial. Further, the gains are fairly symmetric. Bilateral trade increases significantly with export gains for Canada ranging between 39% to 47% and for India, between 32% to 60%.

With this understanding, the Joint Study Group proceeded to examine Canada's and India's trade policy approaches in goods, services and investment, as well as to define complementary issues and cooperation. The Joint Study Group found that, while Canada's and India's approaches sometimes differ, there is an overriding remarkable similarity in objective in the various areas that would comprise a CEPA. A set of common recommendations and objectives were identified that would permit Canada and India to pursue a comprehensive and ambitious CEPA to their mutual benefit. These recommendations are outlined below.

7.1 Summary of Recommendations

In the context of a possible Canada-India CEPA, the Joint Study Group makes the following recommendations with respect to trade in goods.

In respect of services, the Joint Study Group arrived at the following recommendations.

In regard to investment, the Joint Study Group recommends that the bilateral investment agreement should be concluded and ratified. Consideration of additional investment provisions in a CEPA can take place thereafter.

Chapter 5 examines Canada's and India's approaches with respect to other areas of economic cooperation, which will continue to be discussed in the context of a CEPA.

The Joint Study Group also considered a list of existing agreements and areas of cooperation, including Trade Policy Consultations, the Air Transport Agreement, the Science & Technology Agreement, Aerospace, the Social Security Agreement, Education, Agricultural Cooperation, and Energy Cooperation.

The recommendations and findings presented in the report are without prejudice to the final outcome of negotiations for any future comprehensive economic partnership agreement.

7.2 Conclusion

The Joint Study Group finds sufficient common ground to recommend moving ahead with next steps towards negotiation of a comprehensive agreement covering substantially all trade in goods and services; investment; trade facilitation; and other areas of economic cooperation, as a 'single undertaking', leading to additional trade flows and economic gains.

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