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Deeper Integration between Canada and India?

Author

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  • Wendy Dobson

    (The author is at the Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, ON, M5S 3E6, Canada. She can be reached by phone at 416-978-7792; email: dobson@rotman.utoronto.ca)

Abstract

Relative to their economic sizes, structures and linkages, the bilateral relationship between Canada and India is too small. Trade and foreign direct investment (FDI) flows are gradually increasing within such sectors as finance, energy, power and environmental services, agriculture and information technology (IT) services. Two channels are identified to expand this economic footprint: deeper linkages among bilateral business groups to reduce Canadians’ transactions costs relative to those in the United States (US) market; and improved market access for India’s competitive low-cost producers. Governments, which focus primarily on incremental improvements, should elevate the bilateral relationship to a strategic level with the negotiation of a free trade agreement (FTA). Although each government prefers the World Trade Organization (WTO) as the venue for liberalising agricultural trade, it is argued that a services-only FTA would yield mutual gains by removing many of the restrictions affecting both domestic markets and foreign entrants in the two countries revealed by the comparative analysis in this paper.

Suggested Citation

  • Wendy Dobson, 2011. "Deeper Integration between Canada and India?," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 5(1), pages 93-115, February.
    • Handle: RePEc:sae:mareco:v:5:y:2011:i:1:p:93-115
    DOI: 10.1177/097380101000500106
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    More about this item

    Keywords

    Canada; India; Free Trade Agreement; Revealed Comparative Advantage; Gravity Analysis; JEL Classification: F1; JEL Classification: F2;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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