In news– Recently, India and Canada have decided to restart talks for a comprehensive economic partnership agreement (CEPA) and will strive to seal an investment-protection agreement as well.
- CEPA talks with Canada had derailed amid the COVID-19 pandemic but were expected to restart after the Canadian elections concluded in September 2021.
- CEPA negotiations will be formally relaunched, and the two countries will consider an interim agreement or Early Progress Trade Agreement (EPTA) that could be concluded early as a transitional step.
- India is eyeing market access for its sweet corn, baby corn and bananas in Canada, while Ottawa is keen to export its cherries and lumber to India.
- The EPTA shall include ‘high level commitments in goods, services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement, and may also cover any other areas mutually agreed upon’, a joint statement said.
- Furthermore, Canada and India agreed to promote and protect bilateral investment, including through the intensification of negotiations toward a Bilateral Investment Agreement, while considering options to achieve this goal alongside CEPA.
- Bilateral goods trade between the two nations stood at $6.3 billion in 2021 and the two sides agreed that a comprehensive trade agreement would help bolster trade and investment flows.
What is the Comprehensive Economic Partnership Agreement(CEPA)?
- A CEPA is a bilateral trade pact between two countries.
- Unlike FTA, which is a free trade agreement, CEPA aims at lowering trade barriers instead of complete elimination.
- CEPA has a greater spread of both goods as well as services.
History of India, Canada CEPA-
- In September 2008, the India-Canada CEO Round Table recommended that India and Canada would benefit enormously from CEPA by elimination of tariffs on a substantial majority of the bilateral trade.
- CEPA would cover trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade and other areas of economic cooperation.
- A Joint Study was conducted and a report came in September 2010 strongly recommending the benefits of CEPA for both the countries.
- Accordingly, the announcement of launch of India-Canada CEPA negotiations was made by PMs of both the countries in Seoul in November 2010 and the negotiations were formally launched on 16 November 2010 in New Delhi.
- So far, more than ten rounds of negotiations have already taken place.
Further reading: https://journalsofindia.com/free-trade-agreement-fta/