Canada to Negotiate with India

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Last week, India’s Trade and Industry Minister, Piyush Goyal, was in Ottawa to meet with his counterpart, Mary Ng. It brought back memories for me. I smiled as I read that early progress trade talks are progressing. Everything is in the title.

I joined the Department of International Trade in Ottawa in 2011 as a political adviser to Minister Ed Fast. Prime Minister Harper had just won a majority. He had plenty of room and four years ahead of him to put in place what we described as “the most ambitious trade stimulus plan in Canadian history”.

The mandate letter that Minister Fast received was long and ambitious: to conclude free trade agreements with the European Union (EU), Japan, South Korea, Brazil, India and I pass. Foreign Investment Promotion and Protection Agreements (FIPAs) also needed to be concluded. We had to open up new markets and help Canadian businesses break into other countries by negotiating lower tariffs.

The objective was twofold: to ensure that our companies extend their exports beyond the United States and to convince foreign companies to establish themselves in Canada, from where they could have preferential access to the United States markets, of Europe and Asia, thanks to the trade agreements that we had to conclude. The Minister of Industry, François-Philippe Champagne, can therefore thank us, because that certainly played a part in Volkswagen’s decision to open a plant in Canada.

To find out all the behind-the-scenes secrets of international agreement negotiations, Minister Fast had requested a private meeting with Derek Burney. A former senior civil servant, Mr. Burney had participated in the negotiations of the agreement with the United States as Brian Mulroney’s chief of staff and ambassador in Washington.

I had the opportunity to attend this meeting and what I learned from this casual discussion is that any international negotiation involves three stages.

How to negotiate

The first may seem simplistic: it is about initiating negotiations. As on a dance floor, it takes two to waltz: the will must be mutual. You have to get an invitation to the party.

However, this will depends on the priorities of each government, its political programme; it is also limited by resources and time, as well as by the political benefit one is willing to put into play in the exercise.

Respect between leaders and credibility on the international scene are important, but geopolitics or commercial interests are just as important. As General de Gaulle said, States have no friends, they only have interests.

Give credit where credit is due: for the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU, it was Prime Minister Harper who launched the negotiations, in 2009 in Prague , and who concluded them, unveiling the text of the agreement in Ottawa in September 2014. Jean Charest also played a role, working with the European Commission to begin negotiations.

The second step is negotiation. I’m going to tell you a secret: from the start, we know the subjects that are going to be difficult. Each side has its offensive and defensive interests. We can think of supply management in Canada. Same thing for the automotive sector with Japan or South Korea. But we don’t talk about it, at least not at first. The negotiators start with the subjects on which we can agree, to make progress, to close as many chapters as possible, without too much discord.

As Derek Burney had confided to us, before politics enters the dance, we must leave the chief negotiators. In diplomatic terms, you don’t have to be the applicant. It is only once the negotiations have reached a certain stage that they will move to the level of ministers, then to that of heads of state.

The third step is the conclusion. This is when we see if the political will from the start is still there.

The relationship between heads of state plays a big role. They are the ones who make the final decisions. They will only present the agreement if they believe it is in the interest of their fellow citizens. Ultimately, they are the ones who will pay the political price; so it happens that they say no and that we have to go back to the negotiating table.

Brian Mulroney had cultivated good relations not only with President Reagan, but also with his vice-president, George H. Bush. This has served Canada well for NAFTA . There was a tremendous amount of respect between Angela Merkel and Stephen Harper. They each knew all the details of the CETA negotiations, and when the time came to come to a conclusion, they could use their political clout jointly to put pressure on the European Commission.

It should be noted that Canada is absent from three major initiatives: President Biden’s Indo-Pacific Economic Framework, the Quadrilateral Security Dialogue, which brings together the United States, India, Japan and Australia , as well as the AUKUS alliance between Australia, the United Kingdom and the United States to strengthen technological and military cooperation in the Indo-Pacific. This goes back to my point at the beginning, which said that in order to dance, you have to be invited to the party.

Early Progress Agreement

But back to India. I was present in 2011 when Minister Fast met with Narendra Modi, then minister responsible for Gujarat. In 2002, more than 1,000 people died in anti-Muslim riots in that province, and few international visitors crowded Modi’s doorstep. Against the advice of our civil servants, we had met him, because he was a possible pretender to take the head of the country.

It is a gesture that Prime Minister Modi has not forgotten. However, when he came to Canada in 2015, we failed to announce a free trade agreement with India. In fact, we had reduced our ambitions to a FIPA. But even this agreement, and despite Modi’s good will, we could not conclude it. Hence the Trudeau government’s strategy of speaking today of an “early progress” agreement.

I remember an image that Don Stephenson, our chief negotiator with India, used during an evening of debriefing: the game of snakes and ladders. We advance our pawn, we have the impression that we are approaching the goal, then a throw of the dice makes us go back.

India is a market with enormous opportunities for Canadian companies. But India plays on several tables; between the West, Russia and China. Since the conflict in Ukraine, it is the country whose economy is doing the best. India receives oil from Russia at a discount, and no one is offended by the fact that it does not respect the sanctions international. On the contrary, India is courted by all.

Minister Goyal announced in March that India was preparing to abandon the US dollar in its foreign trade. The payment in rupees is part of its strategy to enable the currency to become a global standard.

The three stages that Derek Burney had described to us, we lived them. In office until the end of the Harper government’s term, Minister Ed Fast negotiated the Trans-Pacific Partnership agreement in the midst of an election campaign, after leading talks with the EU and South Korea. He complied with his mandate letter.

Source: Le Devoir