India, Australia miss free trade pact deadline

Despite missing the deadline set by Prime Minister Narendra Modi and Australia’s then-Prime Minister Tony Abbott for December 31, 2015, negotiators are still hopeful that the India-Australia free trade agreement (FTA) or Comprehensive Economic Cooperation Agreement (CECA) will be cleared in the next few months.

In an exclusive interview with The Hindu, outgoing Australian High Commissioner Patrick Suckling called the missed deadline that had been set by the Prime Ministers in September 2014 “disappointing.”

“We are a bit disappointed about that but the good thing is negotiators have been meeting regularly, so have commerce and trade ministers,” Mr. Suckling said, adding “And we very much hope that it will be deal done in the next two or three months.”

However, officials close to the negotiations in Delhi said the optimism may be misplaced. Even after nine exhaustive rounds of negotiations that began way back in May 2011, the proposed FTA talks were nowhere near conclusion, they told The Hindu.

According to the sources, the talks were stuck due to several outstanding issues related to market access in services and goods, with an added complication on tariff reduction.

While Australia wanted India to significantly lower or eliminate tariffs on several agricultural and industrial goods, New Delhi asked Canberra to ease rules on temporary movement of skilled professionals and intra-company transfers. Both sides were yet to accept each other’s demands, the sources said, and trade negotiators had been meeting on an almost weekly basis to break the logjam, an official said.

Sources in the Indian government also pointed out that Australia’s tariffs were already nil or close to zero on imports of most goods from across the world. Over and above this, it was expected to unilaterally eliminate duties in the near future on most items, they said, adding that, therefore, there was very little that India could gain on the goods front on account of the FTA.

Sources in Canberra dismissed this concern, as when Australia decided to do away with most of its tariffs, countries that it had signed FTAs with would stand to gain much more than those that hadn’t.

Asked about the reasons for the delay in the negotiations, High Commissioner Suckling denied that there was any “sticking point per se.”

“It’s just that there are a lot of chapters to be written and clauses etc. …We are at the point when we know what the sensitivities are and what the ambition is on both sides,” Mr. Suckling said, adding that there was “no lack of political commitment” to see the deal through.

A similar political push was seen in November 2015, when both sides forged the civilian nuclear deal to enable Australia to sell uranium to India. After months of a logjam over the Australian Parliament’s concerns on accounting for the use of the uranium in India, the two sides agreed to a “mechanism” like the one negotiated with the U.S. to verify India’s nuclear fuel usage.

“For us knowing where that uranium is going is very important, and we had to have confidence that it will be used for peaceful purposes…So yes, we have worked out a mechanism for doing that. We have broken the back of it, so the whole treaty was negotiated in time for the two Prime Ministers (PM Modi and new PM Turnbull) to announce it when they met at the G-20 in Turkey in November 2015,” Mr. Suckling disclosed, while explaining that several issues had to be negotiated after the meeting as well.

The road didn’t seem as easy for the CECA/FTA announcement, however.

In addition there were the issues that held up free trade agreements with Canada and the European Union, including Intellectual Property Rights.

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Printable version | Nov 26, 2021 10:38:14 PM |

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