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India-Australia free trade talks to resume following Tony Abbott’s visit to New Delhi

ABC News - 12 August 2021

India-Australia free trade talks to resume following Tony Abbott’s visit to New Delhi
By Stephen Dziedzic

Long dormant free trade negotiations between India and Australia have been brought back to life as the federal government again tries to bulk up economic ties between the two countries.

Australia and India began talks on the trade deal – known as the Comprehensive Economic Cooperation Agreement (CECA) – back in 2011, but discussions became bogged down and were suspended in 2015.

Prime Ministers Scott Morrison and Narendra Modi agreed to "re-engage" on the CECA when Australia and India upgraded their relationship to a Comprehensive Strategic Partnership in the middle of last year.

There have been scant signs of progress since then but in a speech last night Trade Minister Dan Tehan revealed India’s Commerce Minister Piyush Goyal had agreed to resume negotiations when he met with former prime minister Tony Abbott in New Delhi this month.

"During his visit, Mr Abbott received confirmation that India wants to progress CECA negotiations this year. This is something Australia wants as well," Mr Tehan told the Australia India Chamber of Commerce on Thursday night.

"Chief negotiators spoke this week, and will meet again next week to discuss the framework for negotiations going forward."

The new trade discussions are expected to bring in both the stalled CECA negotiations and bilateral market access talks which were conducted as part of the 15 nation Regional Comprehensive Economic Partnership (RCEP).

While Australia has joined the massive trading bloc India pulled out at the last moment, partly because it feared local producers would be swamped by dumped imports from China.

The new negotiations are likely to begin within weeks, but Mr Tehan would not put a timeframe on when an agreement might be struck, saying only Australia wanted to cement a deal "in the near future".

The original CECA negotiations foundered partly because India – which has a long history of protectionism – resisted Australia’s demands for greater market access for its agricultural exports.

Meanwhile Indian negotiators were frustrated that Australia refused to liberalise visa conditions for Indians who wanted to work in Australia.

Mr Tehan warned that making real progress this year "would require a serious commitment from both sides to get this done in this timeframe".

"While time cannot dictate the substance of the agreement, we are both looking at putting in additional negotiating resources for this purpose," he said.

"We hope that we will be able to build on this momentum to reach an agreement that reflects the strength of the economic relationship."

The federal government has long wanted to boost exports to India, but China’s recent campaign of economic coercion against Australia has made the search for new market opportunities more urgent.

India is Australia’s seventh-largest trading partner, with two way trade worth more than $24 billion last year. But that’s utterly dwarfed by Australia’s trading relationship with China, which was worth almost $250 billion in 2020.

Australian officials are also keenly conscious that stronger economic ties will buttress the rapidly expanding strategic relationship between Canberra and New Delhi, which share increasing concerns about China’s trajectory.

Earlier this week Mr Abbott accused Beijing of behaving in a "belligerent" manner and declared that "the answer to almost every question about China is India".

"Because trade deals are about politics as much as economics, a swift deal between India and Australia would be an important sign of the democratic world’s tilt away from China, as well as boosting the long-term prosperity of both our countries," he wrote.

Opposition criticises Mr Abbott’s India trip
Mr Tehan also said the federal government would "update" the India Economic Strategy which the former Australian High Commissioner to India, Peter Varghese, handed down in 2018.

"Over the coming months, the update will set out where the government needs to focus immediate attention to deliver the objectives of the IES and further our ties under our Comprehensive Strategic Partnership," he said.

But that’s likely to draw scoffs from the Opposition which has accused the government of neglecting the report.

Last year DFAT officials told a Senate Estimates hearing that many of its main recommendations had not been implemented by the government.

Earlier this week Shadow Trade Minister Madeleine King criticised Mr Abbott’s visit to New Delhi and said Australia’s trade with India had been anaemic under the Coalition.

"The Morrison government has overseen a deteriorating economic relationship with India. According to DFAT, two-way trade with India fell by 13.6 per cent and exports fell 18.4 per cent in the year to 2020," she said.

"Meanwhile the Varghese economic strategy has been gathering dust since 2018."

 source: ABC News