November 12, 2010 / 5:34 AM / in 7 years

Canada and India launch free trade deal negotiations

SEOUL (Reuters) - Canada and India on Friday launched talks on a free trade deal they said could boost gross domestic product in each nation by C$6 billion ($5.9 billion) a year and increase existing trade flows by 50 percent.

The leaders of the two countries said in a statement that “both sides expect a timely conclusion of an ambitious agreement.” It gave no further details on timing.

Canada has in recent years worked energetically to seal a number of free trade deals, partly in an effort to reduce its reliance on the U.S. economy. Three quarters of all Canadian exports go to the United States.

“India is projected to be the world’s third largest economy by 2050 and is a priority market for Canada,” said a Canadian background document.

Canadian Prime Minister Stephen Harper said a deal with India could benefit Canadian exporters of forest products, minerals, manufactured goods, machinery, construction materials and equipment as well as aerospace equipment.

Bilateral trade hit C$4.2 billion in 2009, an increase of 70 per cent from 2004. In 2009, Canada’s main export products were vegetables, fertilizers, machinery and wood pulp.

Imports from India that year were valued at $2.0 billion and consisted principally of organic chemicals, clothing, precious stones and metals, and electronic equipment and machinery.

Reporting by David Ljunggren; Editing by Tomasz Janowski

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