The Australian parliament on November 22 approved a free trade agreement with India and Britain, Prime Minister Anthony Albanese confirmed on Twitter.
Albanese and Indian PM Narendra Modi had discussed the deal on the sidelines of the 17th G20 Summit in Bali, Indonesia last week.The Australian PM is also set to visit India in March.Australia’s Parliament passed bilateral free trade agreements with
India and Britain on Tuesday, leaving those partner-nations to bring the deals into force.The bills easily passed the House of Representatives on Monday and the Senate made them law on Tuesday.The deals need to be ratified by the respective British and Indian parliaments before they take effect. Neither nation has yet done that.The deals are crucial for Australia to diversify its exports from the troubled Chinese market to India and to Britain’s need to forge new bilateral trade relations since it left the European Union.Under the Australia-Britain deal, more than 99% of Australian goods exports will be duty free, including sheep meat, beef,dairy, sugar and wine.The Australia-India Economic Cooperation and Trade Agreement(ECTA) was signed in April but the Indian parliament’s yet to pass the deal.Taxes on 90% of Australian goods exported to India including meat,wool, cotton,seafood, nuts and avocados will also be removed.For India, this is the first trade agreement with a developed country after more than a decade.As per an official government statement, the agreement “encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and Covers areas like trade in goods, rules of origin, trade in services, technical barriers to trade, sanitary and phytosanitary measures,dispute settlement, movement of natural persons, telecom, customs procedures, pharmaceutical products, and cooperation in other areas”.Eight subject-specific side letters covering various aspects of economic cooperation were also concluded as part of the agreement.
MASSIVE OPPORTUNITY FOR SERVICE SECTOR
In 2020, the total goods and services trade between India and Australia was about $18 billion. Some of the major items of export from India to Australia include refined petroleum, telecommunications and information and communication technology services, business services, While the top import items from Australia include coal and education services’ is evident that services are an important component of India’s commercial relations with Australia. In the trade deal, Australia has offered wide ranging commitments in around 135 sub sectors and Most Favored Nation (MFN) status in 120 sub sectors which cover key areas of India’s interests like IT, IT enabled services, business services, health, education, and audio visual. Some of the key offers from Australia in the services space include quota for chefs and yoga teachers; post study work visa of 2-4 years for Indian students on reciprocal basis; Mutual recognition of professional services and other licensed/regulated occupations; and work and holiday visa arrangement for young professionals’ the other hand, India has offered market access to Australia in 103 sub sectors and Most Favored Nation status in 31 sub sectors such as Business services, communication services, and construction and related engineering services.
IMPACT ON GOODS
The covers almost all tariff lines and India will benefit from preferential market access provided by Australia on 100 percent of its tariff lines. It includes all labour-intensive sectors of export interest to India such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and automobiles. On the other hand, India will be offering preferential access to Australia on over 70 percent of its tariff lines, including lines of export interest to Australia, Which are primarily raw materials and intermediaries such as coal, mineral ores, and wines.
MAJOR UPGRADE ON TRADE
India is Australia’s ninth largest trading partner, while Australia is the 17th largest trading partner. Bilateral trade for both merchandise and services between the countries was valued at $27.5 billion in 2021. India’s merchandise exports to Australia grew 135 percent between 2019 and 2021, with imports from Australia at $15.1 billion in 2021 (largely of raw materials, minerals, and intermediate goods).
The UK deal was signed by the government of then Prime Minister Boris Johnson in December and was criticized by his successors for not delivering more for Britain. The accords would come into force 30 days after countries have written to say that the supporting legislation has been approved by their parliaments. Alnanese and his ministers welcomed the Director-General of the World Trade Office, Nzogi Okonjo-Iweala, to the state capital of Canberra on Tuesday. Farrell said the topics of the
talks with Okonjo-Iweala included implementation of the outcome of the World Trade Organization conference in June. The WTO struck a series of deals and commitments in June aimed at protecting marine fish stocks, expanding Covid-19 vaccine production in developing countries, improving food security and reforming a 27-year-old trade. Body that has gotten back on its feet in recent years.