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‘Proposed India-Australia early harvest trade pact likely by year-end or early 2022’

The Hindu BusinessLine | 3 December 2021

‘Proposed India-Australia early harvest trade pact likely by year-end or early 2022’

by Amiti Sen

The proposed early harvest free trade agreement between India and Australia which may lead to lower import duties on a handful of items is well on track and is likely to be signed by the month-end or “very early” in the new year, said Tony Abbott, Special Trade Envoy to the Australian Prime Minister.

China is no more a trusted trading partner for Australia as it had “weaponised” trade, and India had a unique opportunity to step in and fill the gap, said Abbott, who is in India to take stock of the on-going trade negotiations.

“I have had a good and productive discussion with Minister Piyush Goyal and other officials. Both sides are keen to meet the time-line of having an early harvest agreement by the year-end. Based on the discussions, I am confident that we can agree to a pact — which will be fairly large — by the end of the year or very early next year,” Abbott said in an interaction with the media on Friday.

Comprehensive agreement by 2022

The time-line for completing negotiations on a full-fledged India-Australia Comprehensive Economic Cooperation Agreement (CEPA) by 2022, covering areas such as goods market access, rules of origin, non-tariff barriers, cross-border trade in services, financial services, investment (including investor-state dispute settlement), government procurement, intellectual property, geographical indications, movement of persons, competition policy, and sustainable development is also likely to be met, Abbott said.

The early harvest or interim pact, which will cover fewer areas, is likely to include Australian wine, Abbott said, adding that the Australians made one of the best wines. The pact is also expected to include measures to ease the movement of professionals between the two countries, a key demand for India.

“As part of the deal, we would have enhanced mobility,” Abbott said.

Abbott, however, added that Australia was aware of the sensitivities that India had in agriculture because of the small size of its farms, and there have to be “carve-outs” in the area.

Chinese partnership

On Australia’s economic relationship with China, Abbott said that although the two countries had a free trade agreement, Beijing had changed under President Xi Jinping and was no longer a trusted partner.

“As an Australian, we have seen the weaponisation of trade. Some $20 billion-worth of Australian trade has been disrupted or suspended by China,” he said.

He said India was is in a very different situation, as it had democracy, the rule of law and respected the sanctity of contracts.

“The difficulties with China certainly mean that India has a unique opportunity; particularly with the supply chain that needs to be absolutely reliable,” Abbott added.

Withdrawal from RCEP

Abbott also said that India had done well in withdrawing from the Regional Comprehensive Economic Partnership (RCEP) negotiations which had sixteen discussants including the ASEAN, China, Australia and India. The India-Australia CECA talks have been back on track since then.

The decision to re-start talks on CECA, which were suspended in 2015, was taken by Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison last year.

Two-way trade between India and Australia was at $12.29 billion in FY21 and India was Australia’s seventh-largest trading partner in 2020.

 source: The Hindu BusinessLine