Australia still hopes to see India join the 15-nation ASEAN led Regional Comprehensive Economic Partnership that the government decided to quit last Monday, said former Australian secretary for foreign affairs and trade Peter Varghese, who is the author of the paper on Australia’s economic strategy for India, adding he hoped that India’s decision was not final.
“I don’t think this is the final definitive Indian answer to RCEP, the door has been very deliberately left wide open for India and I genuinely hope that at some point, sooner rather than later, India will decide to walk through the door,” Mr. Varghese told The Hindu on the sidelines of an event to release a draft report for India’s economic strategy for Australia, organised by the Confederation of Indian Industry (CII). Mr. Varghese said ultimately, India’s entry into RCEP was dependent on the ‘India-China’ element, as India’s main concerns over flooding of imports in the market, rules of origin, etc are essentially problems with China.
In the past week, Commerce Minister Piyush Goyal had said that the government could reconsider its decision to leave the RCEP grouping — seen as the world’s biggest trade bloc, and due to be signed in February 2020 — if the terms of the grouping for India were amended. Mr. Goyal also said that the focus for the moment was on other Free Trade Agreements with the European Union, U.S., existing negotiations with Australia, and a review of FTAs with ASEAN, Japan and Korea.
Speaking at the same event, MEA Additional Secretary for Economic Diplomacy P. Harish denied that India’s decision to leave RCEP would make other negotiations like the one with Australia more difficult.
“India has a trade surplus with both the EU and the U.S. and has a trade deficit with all the countries in RCEP. Our effort is to enhance our economic engagement with Australia in all aspects including in goods, services and investment in all sectors.”
When asked about any movement in the India-Australia Comprehensive Economic Cooperation Agreement (CECA), that has made little progress in the last five years, Mr. Varghese said that according to the strategy paper, the “India-Australia FTA or CECA should be on hold until we know where India comes out finally on RCEP.”
Focus on 10 areas
“I think it must be remembered that the India-Australia trade engagement is not contingent on any bilateral or multilateral FTA, and we must keep working on ways to grow opportunities between both countries,” he added, however, advocating for a focus on ten specific sectors including education, tourism, natural resources like coal imports and the Adani investment in Australia’s biggest coal mine.
He also expressed the hope that Australian retirement funds would now begin to invest in Indian markets.
However, he said he was disappointed by the lack of response to his report’s suggestions from big business in Australia.
“At the business level I wish I could report an enthusiastic response to the report. The big end of town doesn’t seem to be taking India into account to the extent to which I think it should be,” Mr. Varghese said, adding “I think there is less of an understanding in corporate Australia about what is happening in India.”