Stumbling blocks to FTA can be surpassed, says Australia’s Trade Minister

Changed geo-strategic environment and fresh eyes at work could make the difference, says Dan Tehan

Australia’s Trade Minister Dan Tehan is confident that the stumbling blocks to an India-Australia free trade agreement (FTA), such as the sensitivities for both sides on dairy and agriculture sectors, can be surpassed as negotiations kick off afresh.

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The two countries formally restarted negotiations for an FTA on Thursday, setting a December 2022 target for a complete pact and a commitment to seal an early harvest pact by this Christmas. The changed geo-strategic environment and fresh eyes at work could make the difference, he said.

Difficulties with China

Noting that Australia’s economic ties with China are facing some difficulties that have been “well-documented”, Mr Tehan said that is one reason for them to diversify their trading relationships even as they seek a constructive dialogue with China.

“The geo-strategic environment has seen the India-Australia relationship grow closer and we want to make sure the economic partnership matches that broader strength,” he said, explaining why outcomes that were elusive in past negotiations may not prove so difficult this time.

Compromises and partnerships are possible in agriculture that could boost job creation in both countries, he said. Merino wool could be used by Indian apparel makers and exported back. Australian firms can lend technology and services support to enhance Indian farm sectors’ output or bolster food processing efforts.

Australia will also nudge India to lower import tariffs on its wines. “There is nothing I would enjoy more than being able to provide India with some of Australia’s fine wine. It would be wonderful if Indians could enjoy a little bit more of Australian wine at a more affordable price and that will be something that we will be looking to achieve,” he said.

Tough negotiation

“I would love to be able to celebrate the conclusion of an FTA with Trade Minister [Piyush] Goyal with a very good glass of Australian wine. It will be a tough negotiation, but I am confident of a good outcome for both sides,” Mr. Tehan said in an interaction on Friday evening.

“If we get the FTA up and running, there is no reason that can double our current $25 billion (AUD) trading relationship in the years to come, and then double it again,” he said.

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