India, Australia CECA talks likely next month

Earlier eight rounds were inconclusive over the issue of Australian farm exports to India

India and Australia are soon likely to sit for the next round of negotiations on the proposed Comprehensive Economic Cooperation Agreement (CECA), even as talks between the both gain momentum in an attempt to reach the December-end deadline. This is going to be the ninth round of talks, which will take place in Australia.

The talks gathered momentum since the visit of Australian Prime Minister Tony Abbott in India in 2014. Both PM Abbott and Prime Minister Narendra Modi have given their weight behind the CECA and set the 2015 deadline.

 

However, talks continue to remain stuck on the sensitive issue of agriculture, as Australia is demanding greater access into the Indian markets by way of lower tariffs and duty-free access for some of its dairy products. But for India, this translated into allowing cheaper imports of Australian diary goods that might impact the millions employed in the sector.

India-Australia CECA could well be the first such broad-based free trade deal that the new government would enter into after coming to power last year in May. Ever since the talks started in 2011, both sides have had eight rounds of negotiations.

According to sources, Australia is willing to give India similar concessions in terms of slashing of tariffs in a wide range of goods, as it did with China and New Zealand under a bilateral arrangement.

But in the bargain, Australia is also insisting on “same or greater concessions” that India has offered to Japan and South Korea in the respective bilateral trade pacts with them.

For India, the main concern is how the Regional Comprehensive Economic Partnership (RCEP) agreement pans out, in which Australia is also a member.

Besides, India and Australia have both locked horns over services. Both sides want a liberal visa regime and greater movement of its professionals into each other’s countries.

Bilateral trade between India and Australia presently stands at $15 billion compared to $160 billion worth of trade that Australia has with China.

Recently, Australian Trade Minister Andrew Robb stated that signing the CECA with India is their “number one priority”.  

He also said during the India-Australia CEOs forum, the services sector is a crucial area for both the countries and Australia can contribute significantly in areas such as engineering, education, healthcare, contracting, construction, design and architecture.