Australian Parliament Approves Free Trade Agreement with India

·         ECTA will be Greatly Welcomed by our Business Communities: PM

https://parlinfo.aph.gov.au/parlInfo/download/legislation/billsdgs/8886249/upload_binary/8886249.pdf;fileType=application/pdf

The Prime Minister, Narendra Modi has thanked Australian PM, Anthony Albanese as Australian parliament approves free trade agreement with India.

Mr. Modi also said that Economic Cooperation and Trade Agreement (ECTA) will be greatly welcomed by our business communities, and will further strengthen the India-Australia Comprehensive Strategic Partnership.

In response to a tweet by Australian PM, Anthony Albanese, the Prime Minister tweeted;

"Thank you PM @AlboMP! The entry into force of IndAus ECTA will be greatly welcomed by our business communities, and will further strengthen the India-Australia Comprehensive Strategic Partnership."

'Boost for pharma'

The FTA will also provide a big boost to the pharmaceutical industry in India.

Medicines which have gone through rigorous approval process by USA & UK will now have fast tracked mechanism to get approval in the Australian Regulatory system, Goyal noted.

'Opportunities across sectors'

The agreement opens up significant new opportunities across sectors for Indian businesses.

"India’s textiles and gem and jewellery sectors have been keenly waiting for the agreement to be able to sell to high income earners in Australia," Goyal said.

The agreement, once implemented, will provide duty-free access to the Australian market for over 6,000 broad sectors of India, including textiles, leather, furniture, jewellery and machinery.

Under the pact, Australia is offering zero-duty access to India for about 96.4 per cent of exports (by value) from day one. This covers many products that currently attract 4-5 per cent customs duty in Australia.

The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) needed ratification by the Australian parliament before its implementation. In India, such pacts are approved by the Union Cabinet.

Meanwhile, Australian trade minister Don Farrell in a statement said that the ECTA will enter into force 30 days (or another mutually agreed time) after the respective parties have confirmed in writing that they have completed their domestic requirements.

Farrell added that the agreement will support businesses to grow, to offer more employment opportunities, and will give Australian consumers more choice at the checkout.

He further said that Australia will work closely with the Indian government to implement the trade agreement "as soon as possible".

This is the first time in Australia’s history, where they are giving 100 per cent tariff lines with most lines on entry into force and 113 lines within a period of 5 years.

 

Position of major interest groups in Australia

Stakeholders have been broadly supportive of the ratification of the ECTA, noting it will be a stepping-stone to a broader comprehensive agreement with India. For example, the Group of Eight (a peak body representing Australia’s leading research-intensive universities) welcomed the ECTA for facilitating educational exchange opportunities with Indian students providing them with more post-study work rights in Australia.

The Business Council of Australia (BCA) noted the ECTA is a ‘welcome and important step in the journey towards a greater trade and investment relationship’ with India. The BCA submitted that that the Government must redouble its efforts to conclude a full CECA as soon as possible and listed a number of areas which would require further work, including investment protections, promoting greater labour mobility and greater agriculture access for Australian exporters.

While India has agreed to reduce tariffs on products such as Australian wine and sheep meat, a number of key sectors of interest to Australia (for example, dairy, sugar and wheat) remain subject to high tariffs.

Spirits and Cocktails Australia and the Australian Distillers’ Association expressed their disappointment that the ECTA did not remove ‘the very high tariffs faced by imported spirits’ into India. Stakeholders also questioned the ‘lack of ambition’ with respect to products where tariffs were reduced, with Pernod Ricard Winemakers (which produces Australian wine brands Jacob's Creek, St Hugo, George Wyndham and Orlando) stating that the ECTA ‘represents a missed opportunity to open up a critical growth market at a really delicate time in our industry’.

Queensland Canegrowers Association Ltd noted that ‘India has failed to make new commitments on sugar’ and raised concerns regarding ‘India’s reluctance to abide by its existing international (WTO) trade obligations with respect to sugar and its general reluctance to constructively engage in trade negotiations affecting agriculture’.

The Australian Council of Trade Unions (ACTU) raised a number of concerns regarding the ECTA and called for the agreement to be re-negotiated. In particular, the ACTU argued that the commitments made by Australia in the ECTA with respect to temporary workers are not consistent with the Government’s policy to preference permanent migration and do not protect migrant workers.