India-Australia Relations

RISING SUN

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Dec 3, 2017
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RISING SUN

Senior member
Dec 3, 2017
17,668
7,429

Can an Australia–India FTA succeed where RCEP failed?​

Having secured free trade agreements (FTAs) with almost all key trading partners, Australia is honing in on a long elusive but lucrative market — India. Tensions with China, the need to find new sources of economic growth and government policy to diversify trading partners are pushing Australia into India’s arms. The embrace, however, might not be a warm one.


Farmers, of which one holds an India's flag, block an expressway to mark the 100th day of the protest against the farm laws, near Kundli border, in Haryana, India 6 March 2021. (Photo: Reuters/Anushree Fadnavis).



Despite pressure to conclude a deal, Australia should not settle for a trade agreement that falls short of meaningful commitments by India that improve trade terms for Australian exporters and provide reform momentum in India.


Bilateral trade between Australia and India grew steadily during the last decade but continues to be dominated by coal and is conducted on World Trade Organization (WTO) terms. Trade in sectors where Australia has a comparative advantage, like agriculture, remains uncommercial due to India’s highly protected markets. The lack of a meaningful framework for the bilateral trade and investment relationship is increasingly glaring as the two countries advance in nearly all other areas of cooperation.


India is not part of any regional economic architecture in the Asia Pacific. It walked away from the Regional Comprehensive Economic Partnership (RCEP) at the eleventh hour. And APEC members are hesitant to let India into APEC given its track record of playing spoiler in international economic forums. India is even more unlikely to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which requires commitments well beyond RCEP.


Australia–India FTA negotiations have been fraught with false starts and frustration. In 2011, Australia and India launched negotiations for a Comprehensive Economic Cooperation Agreement (CECA). But since 2015, both parties shifted their focus to the bigger regional deal, RCEP. RCEP negotiations have emerged as the biggest highlight — and disappointment — in the Australia–India economic relationship. Where to from RCEP’s failure is the pressing question for Australia’s new Trade Minister Dan Tehan who hopes to begin talks this month.


India has little appetite for greater trade liberalisation. A Byzantine system of federal governance, polarised domestic politics and a strong protectionist mindset make India a difficult negotiating partner. This is exacerbated by widespread suspicion of international trade and institutional scepticism towards both multilateral and bilateral trade deals, particularly with developed countries. Unfortunately for Australia, India’s domestic agricultural lobby is vehemently opposed to opening up its agricultural market. The Indian government’s relationship with domestic farmers unions has recently boiled over, with large scale demonstrations demanding the government repeal three deregulation-style agricultural laws.


In the preferential trade arena, India is cautious about making liberalisation commitments, deeming them a cause of harmful trade deficits. India’s current FTAs are few and low-ambition. With their ‘zero-sum game’ mindset, Indian negotiators are almost never interested in offering concessions, but are aggressive in pursuing India’s offensive interests. Negotiations with the European Union, Canada, New Zealand and the United States have so far failed to reach any meaningful conclusion.


Australia continues to hold hope for a comprehensive Australia–India FTA that grants Australian agricultural exporters favourable access conditions and nudges India towards broader liberalisation. But it is highly unlikely that India will agree to RCEP-like conditions in a bilateral context, with the lower market access gains (one market instead of 15) being even more difficult to justify domestically.


Australia should nevertheless aim for a high level of market access beyond simply binding India to services liberalisation and current tariff rates. The FTA should align with WTO requirements to cover ‘substantially all trade’ between FTA parties in both goods and services. Australia should also be prepared to accommodate India’s offensive interest regarding worker visas, perhaps to a significant extent.


One condition that Australia should hold firmly to is in pushing broader liberalisation and eventual serious reform in India, potentially by creating a pathway for India to accede to RCEP in the future. For negotiations to even commence, the initial FTA setup would need to be within India’s comfort zone and have tangible results upfront for India’s offensive interests, with flexibility for gradual liberalisation in areas of India’s defensive interests. The agreement should have an economic cooperation agenda mirroring that of RCEP, which can slowly nudge India towards wider regional integration.


It is in Australia’s interest to avoid a scenario where, once the ‘low-hanging fruit’ is picked, India will lose the incentive to proceed with more onerous commitments. Any FTA should be a living agreement with clear provisions on future expansion, and monitoring and dispute settlement mechanisms.


Australia does have another choice: to accept a limited, low ambition, ‘early harvest’ deal that resembles a semi-development agreement, such as the Pacific Agreement on Closer Economic Relations (PACER) Plus. With a huge trading partner, such as India, this will be a new approach for Australia and will require some convincing among negotiators and policymakers alike. The gains from such a strategy are unclear and beg the ‘is it worth it’ question.


Securing preferential access to the growing Indian market would grant Australia the first-mover advantage, and open up new possibilities for diversifying supply chains. But Australia must remain realistic; a significant recalibration of India’s trade posture is dependent on its domestic politics and unlikely in the short term. If the bilateral FTA is done right, Australia may finally succeed in bringing India into regional economic architecture.
 
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RISING SUN

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Dec 3, 2017
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India, Australia sign document to boost naval ties​

Chiefs of the Indian and Australian navies on Wednesday signed a guidance document to streamline interaction between the two forces at various levels.

The Navy said in a statement that the signing ceremony for the ‘Joint Guidance for the Australia-India Navy to Navy Relationship’ document was held via videconference between Navy Chief Admiral Karambir Singh, and Admiral Michael J Noonan, Chief of Navy, Australian Navy.

The document is aligned to the ‘2020 Comprehensive Strategic Partnership’ agreed to by prime ministers of the two nations, and aims to ensure a shared approached to regional and global security challenges, the Navy said.

Australia and India, along with the US and Japan are members of the four-nation Quadrilateral Security Dialogue, or the Quad, which has irked China. The navies of the four Quad nations will also participate in the Malabar Naval Exercise later this year.

The strengthening of the naval ties with Australia comes at a time when India and China are involved in an over 15-month long military standoff in eastern Ladakh.

The Navy statement said the ‘Joint Guidance’ will “serve as a guideline document to showcase the intent of both the Navies to work together bi/ multi-laterally” and its broad scope is focused on “developing mutual understanding, cooperate for regional security, collaborate in mutually beneficial activities and to develop interoperability”.

It said that the document’s highlights include “close cooperation in regional and multilateral fora” including the Indian Ocean Naval Symposium (IONS), Western Pacific Naval Symposium (WPNS), Indian Ocean Rim Association (IORA) and Expert Working Groups subordinate to the ASEAN Defence Ministers’ Meeting Plus framework.

Indian and Australian bilateral defence relationship has strengthened over the years, and Comprehensive Strategic Partnership, Mutual Logistics Support Agreement, conduct of trilateral Maritime Security Workshop and participation of the Australian navy in Exercise Malabar are “significant milestones which underline the role played by both Navies in bolstering this relationship in recent times,” the Navy said.

“The document would be pivotal in consolidating the shared commitment to promote peace, security, stability and prosperity in the Indo – Pacific region,” it added.

Indian Navy conducts exercise with Vietnam in South Chian Sea
New Delhi: The Indian Navy said in a statement on Wednesday that it had conducted a bilateral maritime exercise with the Vietnam People’s Navy in South China Sea. “In continuation with ongoing deployment of Indian Navy ships in the South China Sea, INS Ranvijay and INS Kora undertook bilateral maritime exercise” with VPN on Wednesday, the statement said.

“The bilateral interaction aims to consolidate the strong bond shared by the two navies and would be another step towards strengthening India-Vietnam defence relations,” it added.

The sea phase of the exercise included surface warfare exercises, firing drills and helicopter operations, and regular interactions between the two navies over the years have enhanced their interoperability and adaptability, the statement added.

It said that defence ties with Vietnam have been “robust” and mentioned that in June, both countries “undertook a defence security dialogue and Indian Naval ships have been frequently visiting Vietnamese Ports”.
 
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Gautam

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Feb 16, 2019
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India, Australia direct officials to speed up negotiations for trade pact

India, Australia direct officials to speed up negotiations for trade pact

PTI, Last Updated: Aug 27, 2021, 02:17 PM IST


Synopsis

The bilateral trade between the countries stood at USD 12.3 billion in 2020-21 as compared to USD 12.64 billion in 2019-20.
India and Australia are aiming to reach an early harvest announcement by December 2021 to further enhance trade ties between the two countries, according to a joint statement released on Friday.

This was agreed upon in a meeting held between Commerce and Industry Minister Piyush Goyal and his Australian counterpart Dan Tehan MP on Thursday. The two ministers have directed their officials to speed up the negotiations. They discussed the way forward for an early conclusion of a bilateral Comprehensive Economic Cooperation Agreement (CECA).

"In this regard, the ministers directed officials to speed up the negotiations and to meet as often as required to achieve an early harvest announcement by December 2021 on an interim agreement to liberalise and deepen bilateral trade in goods and services, and pave the way for a comprehensive agreement," the statement said.

They also decided to start consultations on the potential opportunities and impacts of an interim agreement as a pathway to a full CECA.

"The ministers look forward to a balanced trade agreement that encourages expanded trade and investment flows to the benefit of both of our economies and people, and that reflects their shared commitment to the rules-based international trading system," it added.

The bilateral trade between the countries stood at USD 12.3 billion in 2020-21 as compared to USD 12.64 billion in 2019-20.

Under an early harvest pact, two trading partners reduce or eliminate customs duties on a limited number of goods traded between them, while in a CECA the reduction and elimination happen on a maximum number of items.

India, Australia direct officials to speed up negotiations for trade pact
 

RISING SUN

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Dec 3, 2017
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Joint visit to Indonesia, India, the Republic of Korea, and the United States​

Minister for Foreign Affairs, Senator the Hon Marise Payne and Minister for Defence, the Hon Peter Dutton MP, will visit Jakarta, New Delhi, Seoul, Washington and New York to advance Australia’s relationships with our close friends and strategic partners in the Indo-Pacific region.

Australia’s security and economic prosperity is deeply integrated with those of our regional partners in the Indo-Pacific. We share with these key partners a vision for an open, inclusive and resilient region, underpinned by mutual prosperity and stability.

With 2+2 meetings of Foreign and Defence Ministers across four Indo-Pacific countries, this substantive and significant foreign and defence trip strongly reinforces Australia’s active engagement in our region.

Cooperation with partners underpins Australia’s approach to the strategic challenges we face in the region. Through these dialogues, we will advance our continuous efforts to work with others to make a positive and proactive contribution to Indo-Pacific peace and stability.

Minister Payne said that among the most pressing issues for discussion was cooperation on our region’s recovery from the COVID-19 pandemic, and ensuring the recovery takes place in a way that reflects our values and principles.

“During our meetings and engagements across the four countries, we will discuss our continuing partnerships to overcome the pandemic, including through the equitable, safe and effective distribution of COVID-19 vaccines, and our shared path to global economic recovery,” Minister Payne said.

Minister Dutton said the visits are an important opportunity to build on already strong defence relationships, particularly with the United States on the 70th anniversary of the ANZUS alliance.

“I am very much looking forward to meeting with my counterparts face-to-face to build on our already strong relationships and to discuss further our shared interests in keeping our region safe and secure,” Minister Dutton said.

In Jakarta, the Ministers will meet with Indonesian Foreign Minister Retno Marsudi and Defence Minister Prabowo Subianto for the 7th 2+2 ministerial consultations.

“These high-level talks are an important opportunity to take stock of substantial progress against our Comprehensive Strategic Partnership, including COVID-19 response and recovery efforts,” Minister Payne said.

“We will also discuss regional security and joint priorities in support of ASEAN, including practical cooperation under the ASEAN Outlook on the Indo-Pacific,” Minister Dutton said.

In New Delhi, the Ministers will attend 2+2 talks with External Affairs Minister Jaishankar and Defence Minister Rajnath Singh.

“These inaugural 2+2 discussions are a cornerstone of the Australia-India Comprehensive Strategic Partnership, which is founded on a shared commitment to a secure, stable and prosperous Indo-Pacific region,” Minister Payne said.

The relationship between Australia and India is at an historic high, as our nations work together to promote positive regional cooperation. The Ministers will discuss issues including economic security, cyber, climate, critical technology and supply chains.

As Australia and the Republic of Korea advance a mutual commitment to elevation of our bilateral relationship to a Comprehensive Strategic Partnership, the Ministers will also travel to Seoul for the fifth bilateral 2+2 consultations with counterparts Foreign Minister Chung Eui-yong and Minister for National Defense Suh Wook.

“Australia and the Republic of Korea have similar strategic and security interests, and I look forward to discussing our shared priorities and our cooperation with partners, including in the region,” Minister Dutton said.

In Washington, the Ministers will participate in the first Australia-United States Ministerial consultations (AUSMIN) with the Biden Administration, joining their counterparts Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin, to advance a shared vision for the Indo-Pacific.

The Ministers will discuss deepening cooperation on issues such as COVID-19 response and recovery, economic coercion, defence posture, climate, cyber and critical technology, space and supply chains.

Ministers will also undertake calls with other senior members of the Biden Administration.

“I will also travel to New York to attend the opening of the 76th United Nations General Assembly where I will represent Australia at several events as part of High-Level Week”, Minister Payne said.

“This comprehensive program will advance Australia’s shared goals with our partners and allies in the region and builds on the numerous online and in-person engagements undertaken by Australian Government ministers over the past eighteen months,” Minister Dutton said.
 

Gautam

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Feb 16, 2019
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Comprehensive free trade deal between India-Australia by the end of 2022. Would cover trade in goods & services, investment etc.

Early harvest trade deal by December 2021. Duties on certain selected items will be reduced. The items list will by exchanged by October 2021 & then be agreed upon by December.
 

RISING SUN

Senior member
Dec 3, 2017
17,668
7,429
India snags cheap Australian coal stranded at Chinese ports
 
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