Harper warns India to move faster on developing trade

After a slow-moving summit with his Indian counterpart, Prime Minister Stephen Harper told a business conference todayin New Delhi that trade ties between India and Canada are not developing fast enough.

Seeming frustrated by the modest achievements of his visitwhich produced some incremental, sector-by-sector agreements but not the hoped-for Foreign Investment Promotion and Protection AgreementHarper said the "untapped economic potential between us is massive and undeniable."

However, he added tartly, "massive and undeniable as that potential is, it will not develop itself."

There is a kind of parallel to Canada and India and the typical Bollywood plot. Two young people meet. They know theyre meant for each other, but they have obstacles to overcome.... We have to work hard to overcome the obstacles, if we are to get to the happy ending we both want. Stephen Harper

"It will take concerted efforts by both of our countries to reap all of the benefits that this relationship can yield."

Harper said the limited gains so far were welcome, but not nearly enough.

"I acknowledge that there has been progress. The Social Security Agreement is finally done. So too, at last, is the administrative arrangement to complete our Nuclear Cooperation Agreement. Our foreign investment negotiations have come much of the way."

However, he added, "We have to be serious about getting them over the finish line."

Relationship 'parallels' Bollywood plot

Harper's mission comes at a time when Indian Prime Minister Manmohan Singh is struggling to hold his coalition government together. India's vaunted growth is sputtering, its currency, the rupee, is falling and analysts describe current Indian politics as "paralyzed" and "dysfunctional."

The trade talks with Harper's delegation have reflected that. Canadians expressed frustration yesterday when prime minister Singh refused to allow a joint press conference following his meeting with Harperprompting a brief and hastily arranged press scrum by Harper alone.

It is apparent, too, that the Canadians were dissatisfied with the transportation arrangements for Harper, leading toa costly decision by the RCMPto ship Canadian cars to India to ferry the prime minister around in India.

As to the halting progress on trade, Harper made his discomfort clear in his remarks to the World Economic Forum in Gurgaon, a suburb of New Delhi.

"The world is moving quickly; Canada and India must also," he told a well-heeled audience of Indian and international executives. "Time and tide wait for no one. We must redouble our efforts. Let us not lose the chance for both nations that this moment offers."

However, Harper's meetings with Indian national leaders are now concluded.

Harper concluded his speech more hopefully, working in a reference to India's popular film industry.

"There is a kind of parallel to Canada and India and the typical Bollywood plot," he said. "Two young people meet. They know theyre meant for each other, but they have obstacles to overcome. And, before the viewer loses interest, they do, in fact, overcome those obstacles and the happy ending ensues."

"Thats a bit like how I see the relationship between Canada and India. We have had a very promising start. But we have to work hard to overcome the obstacles, if we are to get to the happy ending we both want," the prime minister said.

"For all the goodwill, there are a lot of internal, bureaucratic problems within the Indian system," Harper's former international trade minister Stockwell Day said in an interviewoutside the meetingWednesday. "There needs to be improvement. And it does create some frustration."

"Both sides would like to see that cleared up," Day said. "The red tape commission [the Harper government set up toreview Canadian regulations] would have a field day over here."

Protectionism couldcause 'prolonged recession'

The prime minister also warned of the economic costs of protectionist trade policies. But he said Canada would not wait for trade barriers to be resolved globally.

"Doha is not progressing," Harper said bluntly. "Our trade strategy in Canada ... [is] predicated on the view that Doha will not go forward and we have to ... sign bilateral and regional multilateral agreements, and that's what we're doing."

"Over time, that could generate its own momentum," Harper said.

He also warned of "increasing slippage" amongCanada's G20 partners.

"There's starting to be greater protectionism going forward. It's not an avalanche yet. It's not something to panic about," Harper said."This is the one thing that could keep us, or throw us into a prolonged recession for a long period of time."

Harper also said after his speech that the recovery is being held back by investor fears.

"What worries big actors in the world economy is that there will be some kind of catastrophic event, as happened in late '08, that will send everything into a tailspin," he said.

"If I were to go back and look ahead, I would say one of the things that most surprises me is that four years after this crisis, we're still in it to some degree," Harper added.

Later Wednesday, Harper's tour moved on to the predominantly Sikh Punjab state, touringthe Sikh temple of Sri Keshgarh Sahib Gurdwara and the Khalsa Heritage Complexin Anandpur Sahib, where heshared his reaction to the American election results.

On Thursday, hetravels toBangalore to wrap up the Indian leg of his trip.

[IMAGEGALLERY galleryid=3321 size=large]