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EU-Canada Trade Partnership

In News:In Oct 2016, the EU and Canada signed Comprehensive Economic and Trade Agreement (CETA).With CETA, the EU and Canada are committed to ensure that economic growth, social development and environmental protection are mutually supportive.


  • Helping to generate growth and jobs at home

  • Ending customs duties

  • Letting EU businesses bid for Canadian public contracts

  • Stepping-up regulatory cooperation

  • Protecting European innovators & traditional products

  • Streamlining trade in services

  • Promoting and protecting investment

  • Ensuring good cooperation in the future

  • Protecting democracy, consumers and environment

  • The Comprehensive Economic and Trade Agreement (CETA) is an international treaty between the European Union and Canada.

  • It will be approved by the European Parliament and the governments of the EU’s Member States.

  • CETA is the first trade agreement between the EU and a major world economy. 

Existing trade:

  • Canada is the EU’s 12th most important trading partner.

  • The EU is Canada’s second biggest trading partner after the US and accounts for nearly 10% of its external trade.

  • Trade in goods between the EU and Canada is worth almost €60 billion a year.

Wallonia’s Concern

  • Wallonia believe CETA would threaten their farming and industrial sectors, because they won’t be able to compete with cheaper Canadian exports.

  • Wallonia is the French-speaking region of southern Belgium. It’s known for its medieval towns, Renaissance-era architecture

Implications for India:

  • India-EU Free Trade Agreement, may pose similar expectation .There is lack of consensus on issues such as Mode 4 access for services professionalson the EU side, and FDI liberalisation on the Indian side.

  • It could also hit, India-U.K. Free Trade Agreement: As CETA doesn’t bode well for Britain’s ability to negotiate favourable terms.

Revised Double-tax Pact with Korea

In News: India has notified the revised double tax avoidance agreement with South Korea under which capital gains tax will be levied at the source with effect from April 1, 2017.

Key facts:

  • It aims to avoid the burden of double taxation for taxpayers of two countries.

  • Withholding tax rates reduced to 10% on royalties or fees for technical services from 15% and to 10% on interest income from 15%.

  • Now there will be source-based taxation of capital gains arising from alienation of shares comprising more than 5% of share capital.

  • Now investor can invoke Mutual Agreement Procedure (MAP)in transfer pricing disputes as well as apply for bilateral Advance Pricing Agreements (APAs). It provides for exchange of information, including by financial institutions.  

  • Anti-abuse provisionsare introduced to ensure the benefits of the agreement are availed only by the genuine residents of both the countries.

Indo-Estonia Agreed to transfer Prisoners

In News:The Union Cabinet has given its approval for signing and ratification of an Agreement between India and Estonia on the transfer of sentenced persons.

  • Signing the Agreement facilitates the Indian prisoners imprisoned in Estonia or vice-versa to be near to their families, for serving remaining part of their sentence and shall facilitate their social rehabilitation.

  • The transfer of such prisoners to their own native countries shall also facilitate their social rehabilitation.

Background:Prior to 2004, there was no domestic Legislation under which foreign prisoners could be transferred to the country of their origin to serve the remaining part of their sentence, nor was there a provision for the transfer of prisoners of Indian origin convicted by a foreign court to serve their sentence in India.

  • Hence, the Repatriation of Prisoners Act, 2003 was enacted. For achieving the objectives of the Act, a Treaty/Agreement is required to be signed with countries having mutual interest with India and later to the notified in the Official Gazette.

  • The Government of India has so far signed bilateral Agreements on Transfer of Sentenced Persons with countries including United Kingdom, Mauritius, Bulgaria, France, Egypt, Sri Lanka, Cambodia, South Korea, Saudi Arabia and Bangladesh.

  • So far total 65 prisoners have been exchanged, out of which 55 were Indians.

New Zealand’s PM Visit

In News:New Zealand PM John Key is on his visit to India. Recently, a meeting was arranged between New Zealand PM and Indian PM to discuss on India becoming a member of the Nuclear Suppliers Group. During this meeting, New Zealand has indicated that it will continue to contribute constructively in India’s bid.


  • India and New Zealand share a common historical past British colonies, follow the Westminster model of government, and are members of the Commonwealth.

  • Area of Divergence: Non-Alignment, Nuclear Stance and WTO Negotiations.

  • New Zealand’s was suspicious of the non-aligned movement, and moved towards the anti-communist camp by signing Australia-New Zealand-US Security (ANZUS) Treaty in 1951.

  • New Zealand adhered to the Colombo Plan and ambivalent to the Bandung Conference. However supported India’s role in Bangladesh.

  • India almost completely disappeared from the radar of New Zealand’s foreign policy for some time.

  • Areas of Convergence: Asian Security Architecture, Indian Ocean, Cooperation in Science and Technology, tourism, agriculture, education etc.

  • There are three primary reasons for both to come together –to contain China, rise ofradical Islam in Indonesia and from non-traditional, trans-borderdisruptive forces.

  • Colombo Plan was originally called the Colombo Plan for Cooperative Economic Development in South and South East Asiawas launched on 1 July 1951.

  • It has grown from a group of seven Commonwealth nations – Australia, Britain, Canada, Ceylon, India, New Zealand and Pakistan – into an international organisation of 26, including non-Commonwealth countries.

  • The primary focus of all Colombo Plan activities was on human resources development.

On India’s NSG Bid

 New Zealand is yet to change its hard-line position on only admitting signatories to the Non-Proliferation Treaty into the NSG, a group which works by consensus.

New Zealand’s position is part of New Agenda for Coalition which promotes the NPT and pushes for nuclear disarmament worldwide.

Hence, New Zealand has failed to give an outright statement of support for India’s bid to become a member of the Nuclear Suppliers Group.

New Zealand was also among the countries led by China that have demanded to set criteria for non-signatories of the NPT for joining NSG.

New Agenda for Coalition (NAC) formed in 1998 is a geographically dispersed group of middle power countries seeking to build an international consensus to make progress on nuclear disarmament.

The group was formed in response to the North-South divide that stymied talks on nuclear disarmament and non-proliferation within the framework of the NPT. 

The group was formed in response to the North-South divide that stymied talks on nuclear disarmament and non-proliferation within the framework of the NPT. 

It is composed of Brazil, Egypt, Ireland, Mexico, New Zealand and South Africa.

Recent Development

During recent visit following agreement was signed

Arrangement regarding Food Safety Cooperation with Food Safety and Standards Authority of India (FSSAI).

 MoU on cooperation in the field of youth affairs and sports.

Signed agreements are Protocol to the convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Establish Bilateral Ministerial Dialogue between two Foreign Ministries and agreed to Establish Annual Foreign Ministry Consultations at Senior Officials Level.



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