Australia today said the negotiations for the proposed free trade agreement with India are moving in the right direction but it would be difficult to give any timeline for the conclusion of talks.
Australian High Commissioner to India Harinder Sidhu said that these negotiations are "very complex" and it is "very difficult" to place a timeline on them.
"I think, we would rather have a good outcome than an outcome that does not quite get up to the standards because we have been pushing to a timeline," she said here at a function of ICRIER on trade liberalisation.
Both the sides have missed the deadline of December 31, 2015 to conclude the talks as both the sides are yet to iron out issues in areas like services.
Expressing optimism, she said the negotiations have been proceeding "at quite a pace for quite some time now and we continue to take the negotiations forward".
"The message is that we are very well advanced," she said.
Several rounds of negotiations have been completed for the proposed Comprehensive Economic Cooperation Agreement (CECA) which seeks to liberalise trade and services regime besides removing non-tariff barriers and encouraging investments.
Australia is pushing for tariff reduction in dairy, fresh fruit, pharma, meats and wines. On the other hand, India wants zero duty on auto parts, textiles, and fresh fruits, including mangoes and greater access in services sector.
She said that this is an agreement that promises to deliver substantial benefits to both countries, allowing both the sides to meet at least some of the unfulfilled potential.
For India, CECA will give improved access to the world's twelfth largest economy - an affluent market with the world's fifth highest per capita income, she said.
"With over half of India's exports to Australia currently facing tariffs, it would quickly put India on the same tariff-free footing as our existing FTA partners, such as China - including for key Indian exports such as textiles and clothing, auto parts and jewelery," she said.
The High Commissioner said that it would also facilitate investment flows with Australia, which has the world's third largest pool of investment funds under management.
However, she said that not everyone is comfortable with FTAs. "Jagdish Bhagwati's warning about a spaghetti bowl' of FTA rules is a fair one. There are complexities that can arise from the plethora of FTAs," Sidhu said.
"I see CECA and RCEP, along with other such trade liberalisation endeavours, as critical ways of moving forward. Of testing ourselves on what we can do to open our economies. Of learning how we can achieve gains," she said.
India and Australia are part of the ongoing negotiations for a mega trade deal - Regional Comprehensive Economic Partnership (RCEP).
"These may be smaller steps than a major outcome in the
WTO. And they are not easy steps either. These are complex negotiations with many parts and many interests to consider - which is why our ambitions on timelines for completion are not always met," the Australian High Commissioner said, adding "But they take us in the right direction".
The High Commissioner said they can be thought of as planks in a bridge that is constructed over time.
The pacts are kind of a bridge to carry both the countries to a world with increasingly lower barriers to international economic activity, Sidhu said.
When asked whether there is a link between RCEP and CECA, she said both the pacts are complementary to each other.
She said the bottomline is this that the RCEP is a regional agreement and putting all the member countries on common footing in terms of things like tariffs and reducing non-tax barriers.
But, she said CECA has more range, scope and specificity.
Replying to a question about India's entry into the Asia-Pacific Economic Cooperation (APEC), she said it will be a good thing for both India and APEC.
However she said: "all of this is caveatted by the fact that there is a membership freeze in APEC at the moment".
But the the Australian government's view is that it will be a good thing for India to join APEC.
The benefit for India to become its member includes access and ability to be in conversation with whole bunch of countries and tacking issues about simplifying economic processes and streamlining economies.
She added that "I am not aware of a membership price that has to be paid, I am not aware that to join APEC, you need to commit to certain trade reductions. As far as I know that is not the case".
"We would welcome India's participation in APEC," she said.
Further she said almost half a million, out of a total Australian population of 24 million, are of Indian origin.
There are 53,000 Indian students studying in Australia today, the second largest source of overseas students in that country. And 2,33,000 Indians visited Australia in 2015, making India its eighth largest source of visitors.
Trade and investment between Australia and India now spans a wide range of industries, products and services - from mineral and energy commodities, to sophisticated manufactured goods; from large-scale business services and skills training, to niche products in many different sectors.
"But, on the economic front, I have to say there is also a lot of unfulfilled potential in the relationship too.
"One comparison that a number of observers have made is that, while Australia's two-way trade with India is at 18 billion Australian dollar (A$), it is barely more than one-tenth of our two way trade with China, which stands at A$ 150 billion," she said.
