Interesting item of note in light of what I said:

Canada launches talks with India for comprehensive free trade deal

By Heather Scoffield, The Canadian Press

SEOUL, South Korea - Canada and India are formally launching negotiations for a comprehensive free trade agreement, leaders from both countries announced Friday.

Prime Minister Stephen Harper and his Indian counterpart, Manmohan Singh, made the announcement on the sidelines of the G20 summit in South Korea, culminating years of preliminary trade agreements and exploratory talks.

"This will be of enormous benefit to both of our countries, and obviously of particular interest to the Indo-Canadian business community," Harper told reporters. "This is a key milestone in our relationship. It demonstrates our increasing co-operation."

The two governments commissioned a study earlier this year, which found that a broad free-trade pact would benefit both countries. It concluded that free trade would increase each country’s annual output by about $6 billion, and would boost bilateral trade by 50 per cent.

However, the study also found that there may be some obstacles in negotiations. In particular, it found that Canada usually wants to include side-agreements to preserve environmental and labour standards, while India prefers trade deals without those constraints.

Two-way trade was worth $4.2 billion in 2009, the highest ever but still very low compared to other trading relationships Canada has. Canadian investment in India stood at just $601 million in 2009.

But India will soon be the world’s third largest economy, the government noted in its press release.

No timeline was set for reaching a deal.

"We look forward to working hard and coming to successful and conclusive negotiations as soon as possible," Harper said.

Canada’s relationship with India has not always been so cordial, with Canada being reluctant to get too close to a country engaging in nuclear activity.

But Harper has sought to warm the chill, noted Singh.

The two countries signed a nuclear agreement in June ­­— a pact Singh called "a sea change that has come about in our relationship."

Still, Canada shouldn’t expect an easy negotiation, said international trade expert Daniel Schwanen with the Centre for International Governance Innovation based in Waterloo, Ont.

India is a much sought-after trade partner, and Canada needs to be ready to fully open its borders without strings attached, he said.

"It’s going to be a shock," Schwanen said.

The Harper administration frequently touts its record for negotiating free trade, but many of its negotiations are with minor countries, Schwanen said.

India is different, he added.

Ottawa has had a rough ride with free trade discussions in Asia. Negotiations for a free trade agreement with South Korea have died a quiet death, because of irreconcilable differences over beef and cars. Talks with Singapore are in limbo.

And more importantly, Canada has been left on the sidelines of the Trans Pacific Partnership.

The exclusive TPP started out with just a handful of Pacific Rim countries that wanted an all-encompassing trade agreement. They invited Canada to join, but Canada said no because Ottawa didn’t want to put supply management of the dairy, egg and poultry industries on the table.

Now, the TPP has become the envy of free-traders. The United States has joined, in an attempt to make sure Asia does not become a trade playground only for China. And the line-up to get in is long.

Harper is in Japan this weekend, meeting one-on-one with up to nine different Asia-Pacific leaders, asking them to invite Canada back in — although there is no sign he’s willing to back down on protecting the supply management system that fuels the dairy, egg and poultry industries in Canada, especially in Ontario and Quebec.

So far, the Americans are Canada’s key obstacle, not willing to enter into talks with a country that has that kind of baggage.

A new research paper from one of Canada’s top international economy experts says that Canada should do what it takes to get a seat at the TPP table.

"Canadian policymakers must now up their game," writes Wendy Dobson in a paper co-authored with Diane Kuzmanovic, both from the University of Toronto.

The TPP was small potatoes until the United States joined, the authors say. But at that point, when Washington decided the pact would be the best way to make sure Asia did not become China’s backyard, the agreement became the next big thing in international trade.

For Canada, they write, joining the TPP is a way to do two key things at once: engage the United States in a deeper trade relationship as the benefits of the North American Free Trade Agreement wane; and develop stronger ties with some of the most dynamic markets in the world.

"The status quo in Canada is not a compelling one: the border with the United States is thickening, and Canada has been left out of the potentially game-changing Trans-Pacific Partnership agreement," the authors say.

"The TPP’s structure allows any country that is wiling to accept the terms to join. Canada might need to rationalize its supply-management programs by, for example phasing in the liberalization of quotas."

The exposure to international competition might make Canada’s agricultural producers all the tougher, they argue.

"Such moves risk some domestic political turbulence as Canada’s federalism adapts to changing global realities. But the case for change has been made. Can Canadians afford not to try?"