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Australia eager to ink free trade agreement

The Telegraph (Calcutta)

14 November 2006

Australia eager to ink free trade agreement


Canberra, Nov. 13: Australia is interested in negotiating a free trade pact with India, provided it is comprehensive and takes into account its interest in opening up trade in farm products.

“We are keen to expand our suite of free trade agreements ... we are talking to China, Malaysia, studying the feasibility of one with Japan and also negotiating with the Gulf Cooperation Council,” said Australian trade minister Warren Truss, who will be leading a business delegation to India soon.

The nation, which has been doing business worth $7.5 billion with India, is working to deepen both its economic and political relationship with the country.

As both Australia and India are working out separate free trade pacts with Asean, the lack of a FTA between the two could result in a situation where Asean benefits as a middleman with lower trade benefits for the two commonwealth nations.

“India has already overtaken the United Kingdom as the sixth most important destination for Australian exports ... this relationship needs to be deepened,” Truss said.

However, Australian officials said since farm produce is the major export, Australia would look to India relaxing trade barriers on grain produce, something which may be difficult for India to concede given its domestic political compulsions.

The minister said, “We will try to work out a freer trade agreement ... an agreement which is comprehensive.”

Australia is looking to enter India’s booming financial and retail sectors and is closely watching steps India takes on opening these markets to foreign investments.

India’s emergence as an economic power, its security council ambitions and its drive for nuclear power are being watched with interest by Australian policy makers who possibly view India as a counter-balance to the growing wealth and power of China.

Though Australia is not willing to commit itself to selling uranium to India, it’s open to the idea and is watching how the nuclear pact with the US goes through for its cue. Truss said, “With the increasing interest in nuclear power generation, we are aware of India’s interest in uranium resources.”

Australia possesses about 40 per cent of the known reserves of uranium and as a member of the Nuclear Suppliers Group will be one of the key players India will look to do business with to increase nuclear power generation.

Truss indicated Australia and other Cairns group nations will join the developing world led by India and Brazil to get more concessions out of the European Union and the US on farm trade.

Australia wants
Acomprehensive free trade pact with India

The lack of a FTA means Asean could benefit as a middleman

It will
Ask India to open up trade in farm products. Seek entry in the booming financial and retail sectors

It will not
Commit itself to selling Uranium to India now, but is open to the idea

Other FTA targets
China, Malaysia, Japan and Gulf countries

 source: The Telegraph