By Shastri Ramachandaran
MELBOURNE (IDN) — The unprecedented benefits expected to flow both ways from the India-Australia Economic Cooperation and Trade Agreement (ECTA), which came into force on December 30, are by now well-known in the two countries.
Both India and Australia are upbeat about the ECTA, called the Unity Agreement, as a ground-breaking measure for intensifying bilateral commerce across a range of sectors and taking economic cooperation to an altogether new level.
Under the ECTA, Indian exports, especially of labour-intensive sectors, will benefit from preferential zero-duty market access in Australia. Australia would also facilitate market access and mobility for more Indian professionals.
For its part, India will provide preferential access to Australia on over 70 per cent of its tariff lines. Interestingly, because the ECTA takes effect at the year-end, some exports will get a second tariff reduction on January 1, followed by annual cuts until their duties are eliminated.
The Unity Agreement is almost certain to be followed soon by an upgraded Australia-India Comprehensive Economic Cooperation Agreement.
Australian Prime Minister Anthony Albanese has announced that he would visit India in March 2023 with a business delegation committed to improving trade. Trade Minister Don Farrell, who may travel to New Delhi with Albanese, said that India was already “chomping at the bit” to discuss a second-round trade deal for gaining greater access to Australia’s employment market.
If ECTA reflects Australia’s commitment to diversify exports and strengthen the partnership with India, the comprehensive agreement will push for deeper market access on both sides and cover new areas such as digital trade and state procurement.
For all the mutual advantages flowing from the upgraded bilateral relationship, Australia’s drive to expand, deepen and intensify its economic and commercial partnership is not limited to India.
Australia is aggressively pursuing deals to cement deeper and stronger economic and trade ties with others, too, notably, China, the UK and the European Union. China-Australia ties are warming up after a three-year hiatus, thanks to a path-breaking pre-Christmas visit to Beijing by Foreign Minister Penny Wong.
To follow-up the breakthrough achieved by Wong, Farrell plans to visit China as early as February. He has already extended the olive branch and offered to withdraw disputes before the WTO if China shows “goodwill” by revoking its trade bans against Australia.
According to The Australian, the country’s wine exports to China crashed by nearly $1bn in 2020 amid crippling tariffs of more than 100 per cent, while an 80 per cent duty on Australian brewers’ barley smashed that $1.2bn market. “Non-tariff barriers also devastated Australian beef, lamb, lobster, cotton, timber and coal exports to China, as Beijing punished the Morrison government for leading an international push for an investigation into the origins of Covid-19.”
Now, the Albanese government is seeking to overturn the bans and move on to reviving and boosting its economic and trade partnership with China. At the same, time Australia is also pushing for free trade agreements with the EU and the UK. By current reckoning, Australia expects to have all these deals, including the comprehensive pact with India, wrapped up in the first half of 2023.
As one of the Quad, along with the US and Japan, New Delhi can be expected to closely follow the terms of trade emerging between Australia and other major economies, especially China, keeping in mind the strategic importance and priorities of its own developing partnership. [IDN-InDepthNews – 31 December 2022]
Note: The author is an Editorial Consultant, WION TV, and Senior Editorial Consultant of IDN-INPS. This story first appeared as Spotlight in WION, and is being reproduced with the author’s permission.
Photo: Australian PM Anthony Albanese (left) and Indian PM Narendra Modi. Credit: WION Web Team.
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