The negotiating positions of India and Australia on Comprehensive Economic Cooperation Agreement (CECA) “are too far apart” for its conclusion to be a realistic objective in the near term, according to a strategic report released by Australian Prime Minister Malcolm Turnbull on Thursday.
The report stated that Australia should prioritise trade negotiations with India in Regional Comprehensive Economic Partnership (RCEP) and return to bilateral trade negotiations once an RCEP deal is concluded. The report titled —’An India Economic Strategy to 2035′ — has been authored by Peter Varghese, Chancellor, University of Queensland, who was the Secretary of the Department of Foreign Affairs and Trade of Australia from 2012 to 2016 and served as High Commissioner to India prior to that.
Australia and India have been negotiating a bilateral free trade agreement — termed the CECA — since 2011. The RCEP negotiations were launched in November 2012 by leaders of 10 ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and six ASEAN FTA partners (Australia, China, India, Japan, South Korea, and New Zealand) during the 21st ASEAN Summit in Phnom Penh, Cambodia.
“In a report with a 20 year time horizon, I have not sought to go into the details of what is holding up the conclusion of a CECA. Suffice to note that our negotiating positions are too far apart to make the conclusion of a CECA a realistic objective in the near term. Australia is also negotiating with India in the RCEP … The broader bargain involved in RCEP may prompt greater and earlier concessions from India, and is a higher priority for India than concluding CECA,” the report said.
The report added: “India’s ability to make sufficiently credible market access commitments in RCEP is constrained by its sensitivities in goods, particularly agriculture, but also by its desire to lower its trade deficit with China. A low-ambition agreement, that does not deliver commercially meaningful outcomes, would be a missed opportunity for the region … A CECA with India remains a worthwhile objective. Should India recalibrate its approach to trade liberalisation, Australia should resume CECA negotiations as a priority.”
The report also talked about the China as a factor in strategic partnership between Australia and India. “It is important to understand that Australia and India do not approach China from identical perspectives. Indeed, there are some large differences in our respective relations with China,” the report noted. However, Varghese clarified that views stated on this China factor in the report are his “alone and should not be seen in any way as reflecting an Australian government perspective”.
He added: “India shares our democratic bias but the political character of the Chinese state is not its primary strategic concern. For Australia a democratic China becoming the predominant power in the Indo-Pacific is a very different proposition to an authoritarian China occupying this position.” “When India looks at China it sees a great power with which it shares a long and disputed land border and against which it has gone to war … Australia, on the other hand, approaches China from a different perspective. Ours is not a great power’s view of China. Nor does Australia see China as an enemy or a hostile power,” the report added.