Re-launch of CEPA between India – Canada: – INSIGHTSIAS

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GS Paper 2:

Topics Covered: Bilateral agreements.

 

Context:

India – Canada have agreed to re-launch the Comprehensive Economic Partnership Agreement (CEPA) negotiations to unlock full potential of bilateral trade.

  • They are also considering an Interim Agreement or Early Progress Trade Agreement (EPTA) that could bring early commercial gains to both the countries.

Need for:

  • The trade agreement would help in expanding bilateral trade in goods and services through unlocking the potential across sectors.

 

India-Canada Comprehensive Economic Partnership Agreement (CEPA):

In September 2008, the India-Canada CEO Round Table recommended that India and Canada would benefit enormously from CEPA by elimination of tariffs on a substantial majority of the bilateral trade.

  • CEPA would cover trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade and other areas of economic cooperation.

 

Difference between CECA, CEPA and FTA:

CECA – Comprehensive Economic Cooperation Agreement.

CEPA – Comprehensive Economic Partnership Agreement.

The major “technical” difference between a CECA and CEPA is that CECA involve only “tariff reduction/elimination in a phased manner on listed/all items except the negative list and tariff rate quota (TRQ) items.

  • CEPA also covers the trade in services and investment and other areas of economic partnership”.
  • So CEPA is a wider term that CECA and has the widest coverage.
  • Usually, CECA is signed first with a country and after that, negotiations may start for a CEPA.
  • It is a kind of free trade pact which covers negotiation on the trade in services and investment, and other areas of economic partnership.
  • It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and Intellectual Property Rights.
  • Partnership agreements or cooperation agreements are more comprehensive than Free Trade Agreements.
  • CEPA also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues.

 

Insta Curious:

Did you know that India was the UAE’s largest export destination and second-largest trade partner in 2019 and the eighth biggest investor with a cumulative foreign direct investment of nearly $11 billion so far?

 

InstaLinks:

Prelims Link:

  1. About CECA.
  2. About CEPA.
  3. India’s FTAs with other countries.

Mains Link:

Discuss the significance of India- Australia CECA.

 Sources: the Hindu.

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