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Posted: Sunday, 03 October 2021 09:34

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FTA: Australia- India set Ambitious Target of December 2022

Oct 03: What might seem to be physical implausible today, a target date of December 2022 for the FTA and an interim Agreement by the end of 2021 was announced last Thursday after the meeting between Piyush Goyal, India’s dynamic Commerce and Industry Minister and his Australian counterpart Dan Tehan, at a Press Conference in Delhi, writes Subhash Arora

“What we have agreed today is to make sure to conclude a free trade agreement (FTA) between Australia and India by the end of 2022. This will include an interim agreement, which we will seek to finalise by Christmas,” said Dan Tehan, according to a Report by The Print. He added that the changed geo-strategic environment could make the difference.

Formally called the Comprehensive Economic Cooperation Agreement (CECA), the treated has been in the pipeline reportedly since July 2011.

The meeting agenda was perhaps pushed ahead to one week after the meeting of PM Narendra Modi with the Australian PM Scott Morrison during the first such in-person Quad summit in Washington over a week ago.

Also Read : India to Resume Talks with EU for FTA after 8 years Gap

Negotiations on CECA were suspended in September 2015 as the Modi government launched an exercise to review all the trade negotiations that began under the previous UPA regime. However, both prime ministers had released a joint statement in June last year to revive talks on the bilateral trade agreement.

Quadrilateral Security Dialogue (Quad) is the informal strategic dialogue between India, USA, Japan and Australia with a shared objective to ensure and support a free, open and prosperous Indo-Pacific region. The idea of Quad was first mooted by Japanese Prime Minister Shinzo Abe in 2007. It has brought India and Australia closer, because of the souring relations between China and India over the border disputes and Australia because China had imposed preposterously high import duties in many products including wine to destroy the Australian industry and economy last year - and this only because the Aussie PM had asked China to look into the origin of Covid-19.

Also Read : India and EU getting Ready for FTA Talks in May

“Once the intention for a full-fledged FTA or a comprehensive economic partnership is declared, announced and agreed upon formally, then an interim agreement will cover areas of immediate interest,” said Piyush Goyal. Tehan stressed that the current trade figures of around $26 billion could see a doubling of trade after the CECA was signed. The two countries had announced on 26 August, speeding up negotiations to pave the way for a comprehensive agreement.

Australia will also nudge India to lower import tariffs on its wines. “There is nothing I would enjoy more than being able to provide India with some of Australia’s fine wine. It would be wonderful if Indians could enjoy a little bit more of Australian wine at a more affordable price and that will be something that we will be looking to achieve,” he said.

Also Read : European Union keen on FTA with India despite Protectionist Policies

“I would love to be able to celebrate the conclusion of an FTA with Trade Minister Piyush Goyal with a very good glass of Australian wine. It will be a tough negotiation, but I am confident of a good outcome for both sides,” Mr. Tehan said in an interaction on Friday evening. Dan was on a 3-day visit and has now gone back.

The two countries formally restarted negotiations for an FTA on Thursday, setting a December 2022 target for a complete pact and a commitment to seal an early pact by this Christmas.

Admitting that Australia-China ties had soured since last year, Tehan said that was one reason for them to diversify their trading relationships though they hoped for a constructive dialogue with China. For the record, QUAD had earlier been blocked by Australia under pressure from China but it started functioning only in 2017 after Australia agreed to join back with the changing geo-strategic situation.

Also Read : India- EU Foreign Trade Agreement Talks might restart soon

As a background note, one may notice that even the previous Congress Government could not conclude what was considered an even more important deal- an FTA with European Union (2007-2014). In April 2013, BJP had demanded that the-then government UPA should desist from negotiating a trade agreement with the European Union because of concerns from the auto industry on lower import duties. The ice started thawing only in August 2019 but no report-worthy progress has been made in the sequel so far though several informal talks have taken place.

Also Read : Decision on restart of India-EU negotiations soon

In politics there can be a thin line between optimism and jingoism. We would be able to analyse better when the Jingle Bells start ringing during the Christmas season next year. In the meantime, one hopes that the two ministers have enough of the two governments’ support to pull off what seems to be implausible right now to the mortals like me.

Subhash Arora

 

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