India Beats Canada in Trade Deal

Posted by Daniel Workman Jul 18, 2007

Emerson added that the new trade deal signed in mid-June between Canada & India will enable the Great White North to open up other trade markets and therefore be less dependent on the United States.

Canada ships about 80% of its exports to the U.S. However, there are concerns that the declining U.S. dollar against Canadian currency will lead to significant decreases in the value of Canadian exports.

It is true that the deal with India could increase the value of trade between the two countries from the current US$3.3 billion to around US$18 billion within 5 years.

And, as the Toronto Star article Trade deal with India 'a natural' for Canada (Prithi Yelaja, June 18, 2007) points out, Canada is home to about 1 million Indo-Canadians. This supposedly gives Canada a bridge to India, although one can argue that the Canadian mosaic has always been a bridge to the many countries from which its people emigrated.

The problem is that the new trade agreement gives priority nation status to India, but not to Canada. Further, the deal does not address the issue of outsourced jobs from Canada to India and in particular IT outsourcing opportunities.

In international trade, the most effective leaders negotiate win-win deals for the longer term. The latest agreement with India once again shows that Canadian politicians do not understand the difference between taking advantage of a trade opportunity and being taken advantage of.