On July 9, 2013, Canada's Minister of International Trade, the Honourable Ed Fast, announced the immediate opening of India's market to Canadian eastern-spruce products. The agreement allows Canadian producers of lumber made from the black and red spruce species located primarily in Eastern Canada access to the growing Indian market.
The forest industry is an important sector of the Canadian economy, contributing more than C$20-billion to Canada's GDP in 2012 and employing approximately 235,000 Canadians. The value of Canadian wood-products exported to India has tripled over the past five years, and demand for forest products in India is expected to continue to grow as a result of increases in GDP, the standard of living, and a growing demand for housing. According to Minister Fast, "the potential market for Canadian lumber in India is significant, and this is very good news for Canada's forestry workers and their families." It is likely that the eastern-spruce products will be used in the production of products in high-demand in India, such as concrete forms, scaffolding, joinery, packaging, and furniture.
Prior to this agreement, the eastern-spruce species of red and black spruce were not allowed entry into India due to pest risk concerns. Since 2011, the Canadian Food Inspection Agency and the Canadian Forest Service have been providing pest risk assessment information to the India Ministry of Agriculture in an effort to change this policy – this policy change has now occurred.
The initiative to pursue the agreement was based on a general understanding by the government of "the need to develop new markets for our forest products to ensure the long-term health of our forest sector", according to the Minister of Natural Resources. This new agreement expands on earlier success in 2011 in opening Indian markets to the white spruce and Engelmann spruce species native to Western Canada, which, due to earlier approvals, meant that the entire spruce-pine-fir species group from Western Canada was permitted entry into India.
Further Expansions on Trade with India
A current key priority on the Canadian government's international trade agenda is the Canada–India Comprehensive Economic Partnership Agreement (CEPA). Negotiations began in November 2010, and thus far eight rounds have been completed, with the most recent taking place in Ottawa on June 24 and 25, 2013. The Canadian government has identified several significant economic opportunities to pursue in negotiations with India in the energy, agriculture, infrastructure, and education sectors. The nations are hoping to conclude negotiations by the end of the current year.
The total value of bilateral trade between Canada and India in 2012 was C$5.2-billion, up 12% from 2007. This value can be expected to continue to grow due to the continuing efforts of the two nations to create new bilateral trade opportunities.
Comments
Canada has an ambitious trade negotiations agenda with its involvement in the Trans-Pacific Partnership and a Canada–European Union Comprehensive Economic Trade Agreement which is nearing completion. A Canada–India CEPA would represent another major achievement for Canada and its exporters and importers. The exporters stand to gain better market access at less cost to India's market while importers in Canada stand to benefit through greater sourcing opportunities of goods and services at lower cost. Companies should consider and plan ahead for anticipated benefits from any Canada–India CEPA and in this connection could benefit from monitoring developments in the negotiations, whether directly or with the assistance of external trade counsel.
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