India, Australia aim to finish trade talks by September
Live Mint - 20 December 2022
India, Australia aim to finish trade talks by September
By Shashank Mattoo & Ravi Dutta Mishra
With the interim trade deal between India and Australia set to come into force on 28 December, the two countries are aiming to complete negotiations for the Comprehensive Economic Cooperation Agreement (CECA) agreement by September next year, two people aware of the development said.
The September deadline for CECA negotiations with Australia gains significance as general elections in India, expected in 2024, could disrupt trade talks with a number of countries including Australia. Trade negotiations with the UK which were supposed to have been completed by Diwali this year were delayed due to political uncertainty in the UK.
“The biggest threat to completing the deal before 2024 actually does not have anything to do with trade policy. There is a worry that the Indian system will lose its ability to engage during G20 (presidency) and once political parties start to move into campaign mode," the first person quoted above added.
About 10 years after negotiations first started and then paused, both the countries managed to sign an interim trade deal this year. The India-Australia Economic Cooperation and Trade Agreement (ECTA) is expected to double trade between the two countries in the next five years. However, experts are of the view that a comprehensive trade deal would be crucial for Indian exporters to take better advantage of the free trade agreement with Australia.
Australia is expected to seek more duty cuts on its wine from India in the CECA negotiations after China sharply raised tariffs on Australian wine. China raised tariffs on Australian wine by over 200% following tension between the two countries.
“The duty structure decided on wine in the ECTA negotiations was pretty comprehensive. We are not looking to ease it further during the comprehensive trade negotiations. We aim to complete the CECA negotiations by the end of next year," the official said.
As part of the interim FTA, Australia agreed to allow duty-free wine imports from India and in return New Delhi agreed to reduce tariffs on Australian wines with a minimum import price of $5 per bottle from 150% to 100%, and gradually to 50% in 10 years. Duty on bottles priced at $15 or more will be reduced from 150% to 75%, and to 25% over 10 years.
“Anything that looks like it might have anything to do with farmers may become impossible. Australia is also unlikely to do a deal that doesn’t have something for farmers in it. So that is a risk of derailing. The fact that we have environmental and labour standards in other free trade agreements points to the fact that this is an important part of Australia’s trade policy," the first person aware of the development added.The labour-intensive Indian textile and apparel sector is set to gain big from the trade deal as the sector will enjoy zero-duty access to the Australian market.
