’Vexed issues’ delaying free trade talks
’Vexed issues’ delaying free trade talks
MINT sourced by HT Media Ltd / 09:56 , Jan 31, 2011
Concerns over attacks on Indian students in Australia and Australia’s refusal to supply uranium to India have delayed free trade talks between the two countries. A joint study group recommended a comprehensive trade agreement covering goods, services, investment and intellectual property rights-related issues in May 2010. But the process hasn’t progressed any further. "The draft TERC (trade and economic relations committee) note for starting bilateral trade negotiations with Australia is awaiting political approval from the ministry of external affairs (MEA). Certain vexed issues relating to security of Indian students in Australia and the supply of uranium by Australia to India as a clean source of energy are among the reasons for a delayed response from MEA," a senior commerce ministry official said on condition of anonymity.
Prime Minister Manmohan Singh heads TERC, whose approval is necessary to start trade talks with any country. When asked about the proposed trade talks with Australia, MEA spokesperson Vishnu Prakash said: "The matter is under the consideration of the government of India." Bilateral relations became strained after a number of allegedly racial attacks on Indian students living there. A total 120,569 Indian students were enrolled in Australia in 2009, according to the Australian department of foreign affairs and trade. Australia has also ruled out supplying uranium to India until New Delhi signs the Nuclear Non-Proliferation Treaty. A free-trade agreement (FTA) with Australia will provide India access to markets in East Asia, allowing it to counterbalance the growth of strategic and economic rivals such as China in the region, said the commerce ministry official cited earlier.
China is negotiating a comprehensive FTA with Australia. If signed, the agreement will give Chinese firms an edge over Indian rivals in the Australian market. India’s exports to Australia in 2009-10 totalled $1.4 billion (’6,398 crore today), while imports were worth $12.4 billion -a deficit of about $11 billion. When Australian trade minister Craig Emerson visited India this month, his Indian counterpart Anand Sharma assured him he will discuss the matter after his return from the World Economic Forum in Davos, Switzerland. Sharma is due to visit Australia at Emerson’s invitation in April or May. Ram Upendra Das, senior fellow at New Delhi-based Research and Information System for Developing Countries, said India could gain from the comprehensive FTA as Australia is a capital- and technology-rich country. India should, however, first consolidate its gains from bilateral trade deals with Japan and South Korea before engaging with Australia, Das said.
