House debates

Thursday, 9 March 2023


Treaties Joint Committee; Report

12:21 pm

Photo of Andrew CharltonAndrew Charlton (Parramatta, Australian Labor Party) Share this | Hansard source

I rise to speak on the Joint Standing Committee on Treaties report 202, a review of the Australia-India Economic Cooperation and Trade Agreement. The potential of the Australia-India relationship is enormous. On paper our two countries are highly compatible: two young nations both born in the 20th century with common heritage, geographically proximate, shared democratic values and similar sporting passions. But building and maintaining relationships isn't easy. The uncomfortable fact we have to face in our relationship with India is that for most of our history our relationship hasn't fully realised the potential or the high expectations we had for it. Our trade was lower than expected and our investment was even lower.

For most of the last 75 years of our joint relationship, India was the 20th trade partner to Australia—down from the third-biggest trade partner to Australia in the first 100 years of our relationship before Indian independence. Almost every Australian Prime Minister, from Menzies to Gillard, saw huge promise in the relationship but just couldn't quite realise it. A report to the Hawke government said that Australia's relationship with India was 'distant but cordial'. In the Howard government, Foreign Minister Alexander Downer described the relationship as 'sporadic and insubstantial'.

I'm relieved to say that today we are at a turning point in this relationship. After decades of unrealised potential, the Australia-India relationship is finally getting the attention and care it needs to lift off. The relationship has never been in a better place. This year we have nine ministerial visits from India. The Prime Minister is in India right now, along with a trade delegation, and Prime Minister Modi is coming to Australia for the Quad in May. It's true to say that, in the 76 years of our formal diplomatic relationship, no year has been a stronger one for our relationship than this year.

But maintaining relationships isn't easy. It takes more than common values and international trips and good diplomatic relations to enable a lift-off in our economic relationship. In the case of India, we've had historical challenges. Our economies were never as complementary of each other as Australia's economic relationship was with many East Asian countries. East Asian countries took the export oriented growth model, required a lot of raw material inputs and were producing a lot of manufactured outputs. That was incredibly complementary to Australia's economy, which imports a lot of manufactured goods and exports a lot of commodities. India took a different economic pathway, one of economic self-reliance, that led it to focus on its domestic capabilities and to erect high protectionist barriers around its economy. One of the consequences of that was a weak economic relationship between Australia and India, and that weak economic relationship was the missing ballast in our bilateral relationship. All the goodwill and high-level visits and diplomatic rhetoric couldn't make up for the fundamental lack of mutual economic interests.

In his 1973 speech in New Delhi, Gough Whitlam said, 'There is something missing in recent years in the recent relationship between the two countries.' Well, commerce was the missing piece, but today we're at a turning point—not only because of the ministerial visits and not only because of the concrete diplomatic attempts to improve relations, but because of significant advances in our economic engagement, and the Australia-India Economic Cooperation and Trade Agreement is one of those steps. Entering into force last December, the Australia-India ECTA and further tariff cut on 1 January 2023 have meant that around 85 per cent of Australia's exports to India now enter duty free. In its first month, Australian businesses claimed ECTA's lower tariff rates on over $2.5 billion worth of exports.

It's no surprise that Australian businesses have been keen to take advantage of these outcomes. Our top lamb exporter, Mulwarra Export from New South Wales, will benefit from the elimination of India's 30 per cent tariff on imported lamb. Our fresh rock lobster and wool exports will benefit from an immediate elimination of tariffs. In the services sector, exporters like Global Study Partners will capitalise on the predictability of ECTA service outcomes, allowing them to expand into India with added certainty.

The Australia-India ECTA is often described as an 'early harvest', and that's right; that's a fair description. ECTA is a step in the right direction, to give the Australia-India relationship what it needs to ferment and grow. But, compared to other trade agreements signed by Australia, ECTA is not as comprehensive in scope; it's not as comprehensive in coverage. As a result, the outcomes of ECTA alone fall far short of the changes needed to take this relationship to the next level in the 21st century.

That's why it gives me great confidence to see that negotiations are now underway for a comprehensive economic cooperation agreement, so that, beneath the diplomatic visits and rhetoric, the Australian government is getting to work and adopting a long-term approach to realising the potential of this relationship. We're finally adding the missing piece in the relationship with India—commerce.


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