Canada looks to an unlikely trade partner as CUSMA talks remain uncertain

International trade lawyer Barry Appleton discusses how Canada’s new trade agreements with India could boost leverage in talks with the United States.

Canada is looking to strengthen economic ties with India while closely watching early negotiations between the United States and Mexico on the trilateral agreement.

More than 150 Canadian industry leaders are meeting with India’s largest-ever trade delegation this week, as both countries look to expand trade and investment opportunities.

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Barry Appleton, an international trade expert and interim director of the Balsillie Legal Advisory Centre, says the visit marks a significant moment in the Canada-India relationship.

“This is unprecedented. This is the largest trade delegation from India ever. I mean, ever in the world,” Appleton said during an interview on CTV Your Morning on Monday.

India seen as long-term opportunity

The talks come months after Canada and India signed a multibillion-dollar Comprehensive Economic Partnership Agreement aimed at doubling two-way trade by 2030.

Appleton said India’s growing economy and strategic interests make it a natural partner for Canada as it looks to diversify beyond the United States.

“When we look at the size of the market, our trade with Indians is about $30 billion a year,” he said. “Our trade with the United States is 30 times that, almost a trillion a year.”

Still, he said the relationship with India offers significant long-term potential with agriculture, energy and technology as key sectors.

“We have a lot of opportunity to sell agricultural products to sell manufacturer goods, to import manufacturer goods, to partner on technology,” he said.

Energy exports could also play a major role in the relationship.

“Of course, we have energy, which, India desperately wants and we desperately want to sell,” Appleton said.

• READ MORE: From energy to AI: Five big themes behind Carney’s mission to India

He cautioned, however, that building stronger trade ties with India will take time after years of strained diplomatic relations.

Appleton described the renewed relationship as part of a broader Indo-Pacific strategy for Canada. “So, this is a major pivot, an Indo-Pacific pivot, something that Canada really wants to do.”

Canada not in early CUSMA talks

At the same time, Canada is monitoring the first phase of the CUSMA negotiations between the United States and Mexico. Canada is not participating in the opening round of discussions.

Appleton said the structure of the talks raises concerns for Canada, particularly because decisions made during U.S.-Mexico discussions could affect Canadian industries.

“The U.S. structured the talks. They talk to Mexico first, and talk with us second,” he said. “But they’re setting the table. And we’re not there when they set the table.”

The auto sector is one area Canada will be watching closely.

“The auto discussions in Mexico could significantly impact the auto discussions for Canada,” Appleton said.

He added that Canada must pay close attention to developments emerging from the negotiations. “We have to monitor very carefully what goes on and see where that goes.”

Pressure mounting ahead of negotiations

Appleton said upcoming negotiations with the U.S. are expected to focus on supply management, provincial economic policies and digital trade.

Despite concerns about Canada’s position in the talks, Appleton said the country still has leverage.

“I’m a big believer, that we have leverage that we haven’t used,” he said. The key question, he added, is whether Canada is prepared to use it.

“Now we need to see, are we going to use the leverage that we have, or are we going to get steam-rolled over?”