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Australia keen on ‘specially-tailored’ trade pact

The indication comes at a time when both the sides are preparing for the 8th round of negotiations for comprehensive economic cooperation agreement (CECA) to be held in first week of July.

Written by Shruti Shrivastav | Canberra |
May 29, 2015 2:23:00 am

Faced with a slowing domestic economy and a sharp moderation in the growth rate of its major trading partners such as China, Australia has indicated its willingness to have a “specially-tailored” package for tiding over thorny issues such as visa norms and dairy exports to wrap up a free trade agreement by the end of the year.

A senior Australian government official said that the Australian side is willing to “take into account India’s sensitivities… There are things we can do to accommodate its interests. There is high level of political interest to take it forward. We are open to flexibilities in interest of other countries. We don’t have a rigid template”.

With dairy being one of Australia’s leading industries, employing over 1,43,000 people directly and indirectly, Canberra wants greater market access for its dairy products to India. However, the Indian dairy industry is uncomfortable with the issue. According to those involved in the negotiations, Australia wants to enter the high-end dairy product segment, something which India does not have expertise in.

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The indication comes at a time when both the sides are preparing for the 8th round of negotiations for comprehensive economic cooperation agreement (CECA) to be held in first week of July.

Last year, Modi and his Australian counterpart Tony Abbott had sought an early conclusion of CECA negotiations, with Abbott saying that it should be done by 2016, a timeline considered ambitious by trade experts.

However, dismissing the scepticism that the deadline was too ambitious, Australian foreign affairs minister Julie Bishop said, “I think the CECA is important to us. We are hoping that it will be concluded by the end of the current year.”

Indicating that the visit of PM Modi has “reinvigorated” bilateral relations, Bishop said that there are several areas of common interest.

The official quoted above said that Australia could look at opportunities where it can support Make in India policy, or “there may be cooperation activities in dairy. There are not adequate storage system… may be particular areas in dairy where Australia can contribute without being threatening. There can be cooperation activities when Australia can contribute to productivity of India herds”.

In the CECA negotiations with India, while Canberra wants enhanced access for auto components, financial services, pulses, wines, meat and dairy, New Delhi wants access for professionals, textiles, leather, auto parts, pharma, among others.

However, while India is willing to cede ground on some of the issues like auto components, high-end wine and meat, it is unwilling to budge on issues including movement of natural persons (mode 4) and agriculture.

“There are concerns on agriculture and the services sector. We have reservations about opening up in, say, legal services. Further, there is asymmetry in the level of ambitions of the two nations. While there is zero tariff in Australia, in India it is high thereby putting onus on India. We want movement of natural persons for our IT professionals, including visas at short notice. Then Australia has extremely high level of non-tariff barriers,” an Indian official said while requesting anonymity.

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