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).