Labour, environment may stay out of India-Australia FTA
Economic Times | 3 May 2010
Labour, environment may stay out of India-Australia FTA
Amiti Sen, ET Bureau
NEW DELHI: India has managed to convince Australia to keep issues like environment, labour and government procurement out of the bilateral free trade agreement the two countries will begin discussing soon.
The two countries are likely to accept the feasibility report on the agreement prepared by a joint study group during Australian trade minister Simon Crean’s visit later this week, setting the stage for formal negotiations to begin.
“We were firm in our decision to keep government procurement and non-trade issues like labour and environment out of the ambit of the FTA. We seem to have succeeded,” a commerce department official told ET.
The joint study group includes government officials and academicians from both sides and was set up in 2008 to explore whether a free trade agreement between the two countries made sense.
Australia, like Japan and the EU, was keen to include government procurement in the FTA talks as government supplies generate business of an estimated $80 billion every year in the country.
India is not yet ready to open up the sector to foreign competition. It has also kept out of the voluntary negotiations on a government procurement agreement (GPA) being worked out at the World Trade Organisation, although recently it has sought observer status to observe the nature of give and take.
The official pointed out that while Australia also wanted to include labour and environment in the talks, India had put its foot down.
“We are not giving in to such demands even in the FTA being negotiated with EU. There is no reason for us to soften our stand in case of Australia,” the official said.
Australia is now likely to push for more access in areas of great interest to it like wine and dairy products, having given up its demands on issues that concern India.
With a booming wine industry, Australia is keen on producing wine in India through joint ventures and also selling more wine by persuading India to lower its tariffs wall. It is also expected to ask India to bring down tariffs on dairy products.
Australia is India’s tenth largest trade partner. Potential for Indo-Australian cooperation exists in a large number of areas such as mining, infrastructure development, biotechnology, drugs and pharmaceuticals, information technology, water management, soil conservation and waste disposal, food process-ing and agribusiness, film and television, processing of gems and jewellery, tourism, and education.
