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.
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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