India, Australia interim trade deal not in sight even after PM Modi’s summit with Morrison
The Print | 22 March, 2022
India, Australia interim trade deal not in sight even after PM Modi’s summit with Morrison
by Nayanima Basu
New Delhi: The much-awaited and long-pending free trade agreement (FTA) between India and Australia, also known as Comprehensive Economic Cooperation Agreement (CECA), appeared elusive even after Prime Minister Narendra Modi’s second bilateral summit meeting with Australian PM Scott Morrison. Even an interim trade deal, also known as early harvest deal, didn’t seem to move.
While the CECA is expected to take a while to be sealed, the two allies want to sign an interim trade deal to give some momentum to bilateral trade. It was originally planned to be finalised in December 2021.
On Monday, as the two PMs held a virtual summit, Modi said the remaining issues will be “agreed upon soon”.
“Our Comprehensive Economic Cooperation Agreement – CECA, on this, as you said, I also want to say that remarkable progress has been made in a very short time. I am confident that the remaining issues will also be agreed upon soon. The early completion of CECA will be crucial for our economic relations, economic revival and economic security,” PM Modi said during his opening remarks.
PM Morrison, who began his remarks addressing Modi as, “Kem Cho from Brisbane, Prime Minister Modi”, said India and Australia have made “significant progress” on CECA in a “very short time”.
On CECA, the joint statement issued Tuesday said both the PMs “expressed satisfaction on the large degree of convergence on many of the elements which are close to finalisation”.
“Leaders re-committed to concluding an Interim CECA at the earliest and work towards an ambitious, full CECA by the end of the year to enhance trade and investment ties and deepen the CSP (Comprehensive Strategic Partnership),” it added.
Australia and India launched negotiations for CECA in May 2011. There were nine rounds of negotiations before the talks stalled in September 2015. However, with the Modi government’s renewed efforts at reviving the United Progressive Alliance-era pending trade deals, the talks for CECA were restarted in September 2021.
“I am very sure that we will reach an agreement very soon on the remaining issues, as well. The quick conclusion of CECA will definitely give a boost to our economic [inaudible] and economic security,” PM Morrison said Monday.
Last year, as the talks began to gain momentum, New Delhi and Canberra had set a target of signing an interim deal by December 2021 while the larger CECA continued to be negotiated.
On the eve of the summit, Barry O’Farrell, High Commissioner of Australia to India, told the media that the interim deal, or Phase I of CECA, is likely to be signed by the end of March.
However, no such target was provided by India, which is also keen to conclude the deal in order to boost India-Australia bilateral trade, which currently stands at $12 billion.
“We will try and conclude (the early harvest deal) at the earliest possible,” said Shringla after the summit. “We hope to sort out the remaining issues and come up with something that will be seen as an outcome in this area.”
With the Regional Comprehensive Economic Partnership (RCEP) coming into effect, in which both China and Australia are members along with the 10 ASEAN countries plus Japan, South Korea and New Zealand, the Morrison government is keen to have the trade deal with India signed so as to lessen its dependence on Beijing for goods and services.
‘Unlawful invasion of Ukraine’
In his remarks, PM Morrison also called Russia’s invasion of Ukraine “unlawful” and underlined the impact of the war on the Indo-Pacific.
“Our region is facing increasing change and much pressure, and I think our Quad Leaders’ call recently, which gave us the opportunity to discuss Russia’s unlawful invasion of Ukraine, but it also gave us the opportunity to discuss the implications and consequences of that terrible event for our own region in the Indo-Pacific and the coercion and the issues that we face here,” he said.
“The tragic loss of life underlines the importance, of course, of holding Russia to account. But cooperation between like-minded liberal democracies is key to an open and inclusive and resilient and prosperous Indo-Pacific, and I welcome your leadership within the Quad to keeping us focused on those important issues,” he added.
According to the joint statement, on Ukraine, the PMs spoke about “their serious concern about the ongoing conflict and humanitarian crisis in Ukraine” and “reiterated the need for an immediate cessation of hostilities”.
“They emphasised that the contemporary global order has been built on the UN Charter, international law and respect for sovereignty and the territorial integrity of states. They agreed to remain closely engaged on the issue and its broader implications for the Indo-Pacific,” it said.
However there was no mention of Russia in the joint statement even as PM Morrison was scathing in his criticism of Moscow.
‘Need for secession of hostility’
The India-Australia bilateral relationship has evolved in recent years, developing along a positive track into a Comprehensive Strategic Partnership in 2020.
“Both leaders clearly spoke about the need for secession of hostility,” said Shringla. India and Australia discussed the Ukraine issue at length, and PM Modi also raised the issue of the ongoing border stand-off between India and China, the foreign secretary said.
“On China, both leaders exchanged their perspectives. PM (Modi) did refer to the LAC in Ladakh. Peace and tranquillity in the border areas was an essential prerequisite for normalisation of relations with China,” Shringla said.
PM Morrison also spoke about Chinese actions in the region with PM Modi with a particular emphasis on the South China Sea.
Both sides also discussed joint collaboration on rare earth and critical minerals.
