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Harper hopes for ‘free trade’ agreements with Modi

The Harper government appears to be ramping up its efforts for ‘free trade’ agreements with India now that Narendra Modi is the prime minister of India.

A Canada-India Foreign Investment Protection and Promotion Agreement (FIPA) was signed with the previous Indian government in June 2007, but never ratified. In November 2009, Canada and India indicated they intended to negotiate a Comprehensive Economic Partnership Agreement (CEPA) that was to be concluded by 2013.

The Globe and Mail reports, “The Canadian government hopes India’s new administration under Prime Minister Narendra Modi will finally sign and implement a bilateral foreign investor protection treaty that was negotiated years ago but has languished since. …Ed Fast, Canada’s International Trade Minister, said he now hopes Mr. Modi will send a message to Canadian investors that failed to arrive under India’s previous Congress government, which had been India’s traditional ruling party until it suffered an historic defeat in India’s recent national elections.”

What is Harper seeking?

In October 2012, then energy minister (now finance minister) Joe Oliver was in Delhi and Mumbai to promote sales of “energy, minerals, metals and wood products” to India. Reuters reported at that time, “Oliver said he would try to boost Canadian energy exports to India. Canada exported $1.4 billion worth of natural resources to India last year — including only $4.1 million in energy products — and Oliver said he sees great potential for more trade.” It also appears clear that tar sands exports – via the Energy East pipeline – fit into this agenda too.

What has delayed the ratification of the FIPA?

A November 2012 Green Party of Canada media release explains, “Following an attempt by the Indian government to recover taxes from an Indian subsidiary of UK-based multinational Vodafone, Vodafone threatened to challenge the Indian government’s decision by initiating arbitration proceedings under a bilateral investment treaty such as the pending Canada-India or Canada-China FIPAs. In response to this threat by a multinational against a decision taken by a democratic government, the Indian Parliament is reviewing all such agreements and will not likely sign another, similar to the decisive stance taken against FIPAs by the Government of Australia.”

In May of this year, Vodafone formally started international arbitration on the $2.4 billion (142 billion) tax dispute with proceedings expected to begin by the end of this year.

A closer relationship with Modi?

The Harper government appears keen for closer ties with Modi. 

Today’s Globe and Mail article notes, “Mr. Fast said the federal government has had Mr. Modi ‘on our radar’ long before the Indian politician led his right-leaning, Hindu nationalist Bharatiya Janata Party (BJP) to a resounding electoral victory in May. In 2008, while Mr. Modi was still the chief minister of the northwest Indian state of Gujarat, Canada opened a trade office there, and Stewart Beck, Canada’s high commissioner to India, also addressed Mr. Modi’s well-known Vibrant Gujarat investor summits. ‘I’ve met with him on a number of occasions’, Mr. Fast said. ‘He was very very helpful. He certainly came across as someone who got things done.'”

Given the Harper government’s apparent support, it’s useful to remember this characterization of Modi by Indian essayist and novelist Pankaj Mishra in the Guardian UK. He writes, “Modi is a lifelong member of the Rashtriya Swayamsevak Sangh, a paramilitary Hindu nationalist organisation inspired by the fascist movements of Europe…”

Further reading
Will Modi win hasten a Canada-India free trade agreement?
Indian officials debate investor-state clause
Canada-India FIPA talks appear stalled
Harper in India to seek a free trade deal