The Joint Study Group (JSG) of India and Australia has strongly recommended that both the countries should enter into negotiations for comprehensive WTO consistent bilateral Free Trade Agreement (FTA) covering all tariff and non-tariff barriers that would include goods, trade in services, investment flows and other areas of cooperation.
Stating that significant barriers to goods and services trade remain in both countries, the JSG feels that an FTA between India and Australia would be able to address tariff and non-tariff barriers. The FTA would go beyond each country's commitments in the WTO and cover substantially all trade in goods.
“A comprehensive FTA offers scope to take the relationship to the next level to the mutual advantage of both economies. It could foster even stronger growth, including through more diverse trade and investment flows. Cooperation, capacity building and exchange of information on other issues such as protection of intellectual property rights, SPS (sanitary and phytosanitary) and TBT (Technical Barriers to Trade) matters, competition policy and government procurement could also be considered during the negotiations,'' the study has concluded.
Furthermore, it states that the comprehensive FTA would cover a substantial range of services sectors, including sectors of export interest to both the countries, covering all the four models in General Agreement on Trade in Services) GATS consistent and GATS plus framework, and including enhanced cooperation to assist the recognition of professional services. ``Liberalising investment regimes would result in valuable economic benefits for both countries. Economic modelling indicates that GDP in each country should increase as a result of an FTA and could result in a modest positive impact on total global economic output,'' the study states.
The total amount of trade (in goods and services between Australia and India has been rising rapidly in recent years, reaching almost Australian $19 billion) in 2008. Substantial increase in bilateral trade was possible which could include coverage of resources (mining), agricultural and manufactured goods trade. It felt that trade links between the two countries could be intensified not only through tariff liberalisation but also by adopting other measures, including a mechanism for enhanced customs cooperation, consultation and cooperation in sanitary and phytosanitary matters and agreement on rules of origin to enhance bilateral preferential trade.
