‘Absence of FIPPA curbing investments from Canada’

Canadian Trade Minister François-Philippe Champagne said investments from Canada to India are getting restricted in the absence of a Foreign Investment Promotion and Protection Agreement (FIPPA).

In an interview with BusinessLine , he said India and Canada should expedite talks on having Comprehensive Economic Partnership Agreement (CEPA). Excerpts :

How has been your interaction with the industry?

I have had a lot of meetings since morning. We met Canadian businesses, which are quite active in India, also pension funds that have offices here. We also met BlackBerry. Then we also met the CEO of SpiceJet. This was about a strategic partnership. We are trying to look at what we could do more together, trying to understand India’s regional connectivity as a big strategy. There are 30 million Indians who travel by air now. And there is a lot of potential with Canada being the third largest manufacturer of aircraft in the world with the Bombardier Q400. We were having a strategic discussion about what can we do together. Then we met Jubilant (Life Sciences). It is a success story, has big activities and good presence in pharmaceuticals in Canada. And we talked about what we could do more.

What did you discuss with the Commerce Minister on the proposed Comprehensive Economic Partnership Agreement (CEPA)?

Our trade is $8 billion a year with India. It is very low when I compare it with our trade with the US which is $2.4 billion per day. So, we clearly have to be more ambitious. Both the Minister and I understand the untapped potential we have. Trade is about people and people-to-people businesses. Trade means people. Trade means growth and growth means jobs.

In your discussions with Finance Minister Arun Jaitley what was the key point — FIPPA?

Canadian investors would want to do more with India as they realise the enormous potential whether it is in infrastructure or other areas. But we needed to put a regulatory framework in place to provide certainty and predictability that you would expect from investors. We need to work very diligently. We will work on a common time table to make sure that we progress on that.

Where are both countries placed in terms of moving forward the CEPA and FIPPA?

On FIPPA we can progress very quickly. What I hear from pension funds is that they feel that the absence of a FIPPA is restricting the scope and volume of investments they can make in India. And not only to provide investment opportunities for Canadian pension funds but also because it is in India’s interests to have partners like Canada which are looking at long-term investments and are reliable partners. I think Canadians and Indians can share a lot in common, therefore investment by Canadians is welcome in India.

On CEPA we have decided to work towards a common timetable working diligently. There is a discussion of the PM’s (Justin Trudeau) potential visit. So we want to make progress before that. The agreement we reached with EU is the most progressive in the world. There is a chapter about environment, labour, right of states to regulate health and safety area, investment settlement disputes. So I think this is becoming the gold standard. So the minister (Sitharaman) and I have agreed to come up with a joint timetable. If India and Canada can’t agree together, then who is going to agree?

Will you be pushing some of its provisions of the investment chapter you have under the Canada-EU pact during your negotiations with India?

Yes, we are talking with India about progressive elements in these agreements. That is what people expect from us these days whether it’s on environment, dispute settlement, in respecting the rights of states, there is also a chapter about respecting cultural diversity.

What are those progressive elements?

We want to put people first and putting people first means recognising that these trade agreements (CEPA and FIPPA) need to translate into real benefits for people, workers, exporters, SMEs. That is what we are advocating.

How big a concern are provisions like investor-state dispute settlement (ISDS) and most-favoured nation (MFN) that are part of India’s model BIT?

I can only speak for Canada. What we will insist in our trade agreements is having progressive elements in them. Understanding that with different nations there might be different aspects but always making sure that the values we want to promote will be reflected in the trade agreement that we are doing.

Both sides have set a bilateral trade target of $15 billion. Will that be achievable without a CEPA?

There are some low hanging fruits. What I am telling you today are real discussions. These are facts. I have people telling me if we have a FIPPA we will be more comfortable. We will not have to discount some of our investment for risk factor. This is a clear signal. There are people who would like to look at India as a spring board to look at Bangladesh, Sri Lanka, Pakistan. For me there is huge untapped opportunity.

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