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India and Australia are preparing to “rapidly’‘ start negotiations on a full comprehensive economic cooperation agreement (CECA) which will go beyond the recent free trade agreement (FTA) forged between the two countries and explore areas that had been left out such as government procurement, investor protection, digital trade as well as a variety of farm produce.
While the India-Australia FTA, officially called the Economic Cooperation and Trade Agreement (ECTA), is expected to be ratified by the Australian Parliament in a few months time, Australian officials have indicated that talks for the full-fledged CECA would begin soon, an official tracking the matter told BusinessLine.
“This also shows that Australia’s new Labour Party government sworn in last month is as keen on taking forward economic ties with India as the previous one,” the official said.
In fact, Australia’s new Minister for Trade and Tourism Don Farell met Commerce & Industry Minister Piyush Goyal on the sidelines of the WTO Ministerial Conference in Geneva last week, to discuss ratification of the ECTA and start of CECA negotiations.
“I confirmed the Australian government’s intention to work efficiently though Australia’s parliamentary processes to ratify the Australia-India ECTA quickly, so we can deliver immediate trade benefits for our countries. Minister Goyal and I also committed to move rapidly to commence negotiations on the full CECA and capitalise on the enormous potential for closer economic ties between Australia and India,” Farrell said after the meeting.
ECTA pact
The India-Australia ECTA signed on April 2 is a fairly ambitious agreement in goods. Australia has agreed to provide zero-duty market access for 96.4 per cent value of Indian exports on the first day of implementation of the agreement while India has agreed to do so for 85 per cent of Australian goods.
New Delhi, however, managed to get most agricultural items and all dairy products excluded from the ECTA, as these were highly sensitive items crucial for ensuring the protection of the farm sector from unbridled competition. The FTA seeks to double India-Australia trade to $50 billion by 2030.
In the CECA, the Australian side is keen to include some agricultural items such as nuts, pulses, grains, oilseeds, cotton and wool in addition to processed food and beverages.
“Australia will also seek improved access for service suppliers, and moder ninvestor protections to increase investor confidence and drive investment, with appropriate safeguards for governments’ rights to regulate. An agreement could facilitate digital trade by including modern and forward-looking rules which support the use of digital tools to enable trade,” according to an update by the Department of Foreign Affairs and Trade (DFAT) on the country’s India Economic Strategy to 2035.
India and Australia had agreed to start negotiations on a full-fledged India-Australia CECA within 75 days of the signing of ECTA.
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