House debates

Thursday, 9 March 2023


Treaties Joint Committee; Report

10:59 am

Photo of Dan TehanDan Tehan (Wannon, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | | Hansard source

It gives me great pleasure to speak on this Report 201: free trade agreement between Australia and the United Kingdom of Great Britain and Northern Ireland. For those who may not know, I had the great honour of negotiating this free trade agreement with the United Kingdom with Liz Truss and then Anne-Marie Trevelyan. It is a very, very good free trade agreement for Australia. I welcome the fact that the committee has looked at this agreement and has recommended that it come into force as a treaty.

As the report clearly outlines, there are significant aspects of the Australia-UK FTA for Australia. Some of these are detailed in section 2.14:

      less red tape when you export.

        That's so we can rebuild and strengthen those people-to-people links, especially amongst young Brits and young Australians, which is incredibly important to keep building that wonderful special relationship we have with the UK.

            Not only will we see those people-to-people links strengthened; you'll also see those business-to-business links strengthened with the mutual recognition of qualifications, making it easier for people to travel between the two countries to work.

                This is making sure that our young, dynamic, smaller businesses can benefit from this.

                  a unique aspect of this free trade agreement.

                    once again, components new to FTAs.

                      If our countries are going to continue to build and strengthen an economic relationship for the next century, then having this Strategic Innovation Dialogue will be absolutely critical for that.

                      But it's not just Australia that will benefit from this free trade agreement; it's also the UK that will benefit from this. The report details this as well. It's worth remembering that free trade agreements aren't about winners and losers; they're about everyone winning, and this agreement is absolutely true to that. For the UK, there is:

                                        So there are wins for Australia and wins for the UK, and overall both our countries benefit. There are numerous ways that we do that. We benefit because we send a strong signal to the rest of the world that free trade, liberalising your economies, strengthens those economies, strengthens links across the world. If we are to continue to see our economies grow, especially as we come out of the pandemic that we've been through, in this post-pandemic period, making sure that we continue to liberalise is absolutely crucial. One of the things that we're seeing around the world—and it came out of the pandemic—is a push for greater protectionism. That is not in the interests of Australia and it's not in the interests of the UK, especially now that the UK have come out of the EU.

                                        What this agreement does above all else is make sure that those economic links between our two economies will now continue to grow for the foreseeable future. Those of us with long enough memories remember what happened when the UK entered the EU in the early seventies. It cut itself off economically from Australia, and that caused a lot of hardship, especially in the Australian agricultural sector. But this agreement rights that wrong and, in particular, will provide access for Australia's agricultural sector the like of which it hasn't seen since before the early seventies—access for our beef, our lamb, our sugar producers, our dairy producers, our rice growers. I'll just give you one example of how this will benefit both countries. We will now be able to ship sugar out of Queensland across to the UK, up the Thames to a sugar mill where they will turn that sugar into products such as golden syrup—adding manufacturing value in the UK, adding export value here in Australia. It is a true win-win outcome.

                                        This negotiation was difficult because it was done during the pandemic. That meant that the normal consultations and negotiations that you would undertake, especially in face-to-face meetings, couldn't take place. I just place on the record again the wonderful job that Australian negotiators and UK negotiators did in finalising this free trade agreement. I think that here in Australia we have the best trade negotiators in the world, and we must ensure that we continue to empower them and give them jobs so that we can continue to push for liberalisation. With their negotiating skills, we're always going to get good outcomes. I give a big shout-out to the UK negotiators too, because, as part of the EU, the UK didn't have a trade negotiation department or section, and so they had to, from the ground up, build a negotiation capability. They were able to build that up from scratch and make sure that we got an outcome which benefits both countries. I also give a big shout-out to Liz Truss, the UK trade minister, with whom I negotiated the interim deal—which basically was the framework that we then made sure was recognised and respected in the final agreement—and to Anne-Marie Trevelyan, with whom I sat down and dotted the i's and crossed the t's and made sure that what had been agreed in principle was finalised correctly in the final product.

                                        This is an excellent free trade agreement. It's the best free trade agreement we have negotiated since our negotiations with New Zealand. It will set both countries up for the future. I'll finish on this note, because it's incredibly important. It is also going to help the UK with their further economic engagement in the Indo-Pacific. It will help them in their accession to the CPTPP. It is in Australia's interests that we see that economic engagement from the UK enhanced in the Indo-Pacific. We will continue to work with the UK to make sure that that accession takes place because a stronger, more economically secure Indo-Pacific is also in our interests. I commend this report to the House.

                                        11:10 am

                                        Photo of Josh WilsonJosh Wilson (Fremantle, Australian Labor Party) Share this | | Hansard source

                                        I seek leave to speak again without closing the debate.

                                        Leave granted.

                                        I welcome this report, which I had significant involvement in as the chair of the Joint Standing Committee on Treaties. It has recommended ratification of the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland. On the Australian side that has occurred, and the enabling legislation has been through the House of Representatives as well. We are still waiting for some of the process that needs to occur in the UK to take place before it comes into force, and we hope that that can happen as soon as possible.

                                        I will follow some of the remarks just made by acknowledging the work that the former minister did under the previous government. That was very significant, particularly in the COVID circumstances. I believe that it was actually concluded by a virtual signing, which obviously was one of the virtual events that we all had to make the best of through a difficult period. But I acknowledge the work that the former minister did in concluding what was a very significant agreement. It's the first trade agreement the UK has signed post-Brexit that is completely new and, as the previous speaker, the member for Wannon, said, it's the most ambitious trade agreement we've concluded with any country other than New Zealand.

                                        There's just no question that trade is critical to Australia and that trade with the UK is critical to Australia. They're our fifth-largest two-way trading partner. They're our third-largest services trading partner. The UK is both the second-largest source of foreign direct investment and the second-largest recipient of outgoing Australian foreign investment. That gives you some sense of the significance of the relationship and the value that will be achieved when we improve the terms on which we trade with the UK, both in goods and in services.

                                        As the member for Wannon said, when this agreement comes into force it will take the tariff-free access for Australian goods exports from 89 per cent to 99 per cent. That is a pretty significant jump, particularly for the goods that constitute the highest value exports from Australia to the UK, which are gold, alcoholic beverages, lead, pearls, gems and so on. Obviously, from our point of view, the United Kingdom is very significant also as the fourth-largest source of inbound tourism. We'd like to see that keep growing, especially in the post-COVID world. There are aspects of the agreement that make it easier for citizens of Australia and citizens of the UK to travel to, spend time in and work in our respective countries, and I think that that's something that's very worthy.

                                        Some other things about the agreement are pretty significant. It has a world-first chapter dedicated to promoting innovation—and this is the first time such a chapter has been included in any agreement, and that's certainly worth noting—and it has an Australian-first chapter that looks to enhance women's access to the full benefits of trade and investment. I think that's notable in the week that we mark International Women's Day. It's true that in lots of areas of social and economic life that women haven't had the opportunity to participate fully and equally in trade and investment. So that chapter in this agreement between us and the UK is an Australian first. Those are features of what can be described as WTO-plus agreements, in the sense that they go above and beyond the sort of content that is traditionally covered through the WTO.

                                        There are also provisions in this agreement that seek to advance Indigenous interests in a number of ways and to open new opportunities for First Nations exporters, and that's welcome. One of them that I can point to goes to the artists resale royalty arrangements. We have a scheme like that in Australia, which the previous Labor government put in place. The UK has a scheme as well. It's envisaged under this agreement that those arrangements will become reciprocal. That's pretty significant for people who may not have turned their minds to resale royalty arrangements. You can understand that for an artist who sells their work initially—perhaps when they are developing they might also sell their early works for a relatively low price—as their artistic talent comes to be established and recognised the value of their work increases, and then the work is sold and onsold. But the benefit of the increase in value—a significant part of which is due to the reputation and artistic expertise of the person who has created that work—is never seen by them. Resale royalties essentially mean that, as that asset increases in value and moves from owner to owner, some of that increase in value is returned to its creator. I think that's appropriate. You can imagine that First Nations art being sold into the United Kingdom is not insignificant and probably will grow. If we can end up with those reciprocal arrangements it will mean all artists, but certainly First Nations artists, will benefit from that. That's something we really welcome.

                                        It's never the case you get everything you want in a trade agreement. The member for Wannon was right to say we have excellent negotiators. The public servants who work in the Department of Foreign Affairs and Trade are excellent people, and they do great work behind the scenes when parliamentarians and ministers get to be in the flash of the camera light, signing agreements; that, of course, occurs off the back of years and years of work of dozens and dozens of people, and it's absolutely right we recognise that. There are some things we won't get in agreements just because that's the nature of negotiations. There are some areas that, through the course of the inquiry, we were alerted to in which, while improvements were made, there are further improvements we would like to see, and they tend to go to agricultural products. Australia is essentially a free and open import destination; people can bring goods into Australia tariff free in almost any category whether or not they have a trade agreement with us, frankly. The UK, like a number of countries, including the US, who sometimes style themselves as champions of the free market and liberalisation, continue to practise some self-interested protective measures. There continue to be some areas in agriculture, around beef, sheepmeat, dairy and sugar, that could be further liberalised, going further from what has been achieved under this agreement.

                                        There was some significant improvement in terms of access to wine. That's significant because the UK has become the No. 1 export destination for Australian wine, because, sadly, China is not allowing the export or import of Australian wine. Our exports of wine to China were at the top of the list, around $1 billion annually. That has fallen away very significantly, and that means the UK, at about $500 million a year, is our top wine export. Through this agreement, the tariff of two pounds and 20 pence that used to apply per bottle of wine with less than 15 per cent alcohol by volume has disappeared, and the tariff of three pounds per bottle of wine or alcoholic beverage with over 15 per cent alcohol has also disappeared. Australian Grape and Wine have told the committee their best guess is that that will deliver a $43 million benefit to our industry here. That's really important, particularly when you see all these arrangements in their context. We want many opportunities for our exporters, not least because when things go wrong, as has occurred, and we find ourselves on the end of unjustified and, I would say, from China's point of view, self-harming geoeconomic coercion—it's China and their consumers that are missing out on the wonderful joys of Australian wine. But, when we find things like that happening almost overnight, it's really important that Australian producers, exporters and manufacturers have other options. This change will no doubt expand the export of alcoholic beverages, particularly wine, to the UK.

                                        For all of the reasons that I've identified and that the member for Wannon has mentioned, this is a really significant agreement, and I'm glad that it has been achieved. We've done our part, and we look forward to the UK doing their bit, and it'll come into force.

                                        11:20 am

                                        Photo of David SmithDavid Smith (Bean, Australian Labor Party) Share this | | Hansard source

                                        I also rise to speak on the Joint Standing Committee on Treaties report on the UK free trade agreement. I do that both as a proud member of the Albanese Labor Party and in my capacity as chair of the United Kingdom parliamentary group.

                                        The Australia-United Kingdom free trade agreement is the first full trade agreement the United Kingdom negotiated from scratch following Brexit. This agreement will deepen our already strong economic relationship with the United Kingdom and offer greater opportunities for our businesses to diversify their trade markets. The implementing legislation for the agreement has already passed our parliament, and we stand ready for implementation.

                                        As the Prime Minister said, this agreement will strengthen our existing trade and economic relationships. This new agreement will create new opportunities for trade diversification and great outcomes for Australian business and Australian families. Beyond trade, we have the all-important AUKUS relationship. AUKUS applies our mature and trusted relationship to the geopolitical challenges we face in the region and further abroad. As we stand up for democracy and the rules-based international order here, closer to home, the task for Australia is much easier knowing that the United Kingdom will be standing alongside us.

                                        With the ongoing war in Ukraine, we have seen stronger collaboration between our nations. We have seen British and Australian armed forces training members of the Ukrainian armed forces to help them defend themselves against Russian aggression. In a powerful reflection, the Deputy Prime Minister, on a recent visit to the UK to attend AUKMIN meetings, said of our two nations' collaborations:

                                        In Eastern Europe, in the Indo-Pacific. There is a very high degree of alignment in the way in which we see the world, and we are thinking about it, and thinking of what we need to do as two nations working together. A sense of shared mission is really what characterises the way in which Australia and United Kingdom are going about its work and there was no better example of that and what all of us here witnessed yesterday when we saw our Defence Force personnel working together to train Ukrainian forces.

                                        Our two countries always have had shared interests. We share history and we share values. We have been shaped by each other and we shape each other today. The trust and openness with which we engage with each other, which is so important at this time, is critical to the challenges that we face. Australia and the United Kingdom have a shared vision for what our world looks like. It is a world which is peaceful, stable, prosperous and respectful of sovereignty, and one in which the rule of law, international law and norms, is protected. But the relationship between the UK and Australia runs deeper than just economic and security issues. The most important part of our relationship is its enduring value to both sides. The deepening of our relationship has withstood a change of government here and the turnover of prime ministers in the United Kingdom. In spite of these changes, the relationship continues to deepen, and the values which underpin it continue to endure.

                                        At the heart of that relationship is a commitment to equality and fairness at home and abroad. It also involves, as the UK high commissioner Vicki Treadell said in a fine speech to the Press Club yesterday, understanding our own history and colonial past. A key to our shared relationship is projecting who we are today: nations that are both magnificently diverse, where we strive for inclusivity and we stand up for democracy and for fairness in a challenging world. As the high commissioner rightly put it:

                                        We do not forget history but we must learn from it to inform our present and our future, to be a force for good we wish to be.

                                        The Australian parliamentary UK country group has an important role to play in this regard. Like many Australians, I have strong family connections to the United Kingdom. On my mother's side, I have family links back to Wales, with my grandmother leaving as an infant during the rural depression in South Wales in the late 19th century. I lived and worked in the UK, in Slough, a place most of the people in the House might be more familiar with as the home of The Office. It's much better than in The Office, I should say.

                                        On a personal level, I've found political inspiration from United Kingdom political figures such as John Smith, Roy Jenkins and Clem Attlee. Indeed, John Smith is a great reminder of the honour we have of serving in a democratic parliament such as our own. Understandably, the Australia-United Kingdom parliamentary group is a popular one. Its popularity stems from not only the relationship Australia historically enjoys with the United Kingdom but also our capacity to refresh it for today and the shared future we look forward to. The opportunity we have to work on the good work that has been achieved through this free trade agreement is the goal that we have over the rest of this parliament for that parliamentary group.

                                        I was reminded of the closeness of the relationship between our countries last year as I hosted the Minister for State for Indo-Pacific, the Rt Hon. Anne-Marie Trevelyan. With Her Excellency the British High Commissioner, I took the minister on a tour of Parliament House. We looked at the relics from Westminster from the Blitz and she even got to meet and interact with a visiting school from South Australia, I think. The minister's visit here and the reception she received were an example that our relationship is far from being in a set-and-forget holding pattern; rather, it's at the forefront of foreign policy and the trade agenda for both governments.

                                        This free trade agreement will be a gold standard trade agreement that will drive increased trade, two-way investment, economic growth and job creation. The agreement will enhance our already strong economic partnership with the United Kingdom and will contribute towards Australia's export diversification and economic recovery from COVID. The agreement represents substantially increased opportunities for market access for Australian exporters, particularly agricultural exporters. When it enters into force, over 99 per cent of Australian goods exports will enter the UK duty-free, including sheep meat, beef, dairy, sugar and wine. Building on our strong people-to-people links, the Australia-United Kingdom Free Trade Agreement includes measures designed to increase the mobility of skilled workers and young people in both directions. It also includes commitments to liberalise access to all service sectors including professional, business, financial and telecommunications services. The agreement is innovative, as previous speakers have mentioned, with a world-first chapter dedicated to promoting innovation, and an Australian-first chapter to enhance women's access to the full benefits of trade and investment. It is the first wholly new free trade agreement the United Kingdom has completed since it left the European Union.

                                        It's clear we are separated not only by geography. We are two independent nations with strong independent futures, but we share a rich history and rich values and now, thanks to this free trade agreement, we are deepening economic trade, further collaboration with industry and taking the Australia-United Kingdom relationship further. Outside of these parameters, I will continue the work of our interparliamentary union to further build our relationship for the remainder of this parliamentary term.

                                        I thank the hard work of the joint standing committee and for their report, but I particularly thank the hard work of our trade officials from both countries on achieving this historic trade agreement.

                                        Debate adjourned.

                                        11:29 am

                                        Photo of Dan TehanDan Tehan (Wannon, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | | Hansard source

                                        It's a great honour to speak on Report 202: Australia-India economic cooperation and trade agreement. It is particularly poignant that we are speaking about this Australia-India trade agreement today, because, as we are all aware, the Prime Minister is in India at the moment with a trade delegation, building on the work that has been done through this trade agreement. If you want to see the benefits of the Australia-India free trade agreement coming to the fore already, you don't have to look any further than what is occurring in India right now. The Prime Minister is over there, building on the work that was done last year through the signing of this agreement. All of us, I know, wish the Prime Minister and his delegation all the very best and the greatest of success, because, if that trade delegation is a success, it means that we're going to see more success into the future. We all know and understand how important the economic relationship with India is, and is going to be, into the future.

                                        This report sets that out. There are a number of details in this report as to the types of benefits that will accrue as a result of the Australia-India free trade agreement. They are across the board, but there is one figure that I think is worth all of us noting. The national interest analysis says there will be a net gain for the Australian economy because the Australian government expects exporters to save approximately $2 billion over the forward estimates, to 2025-26, as a result of this agreement.

                                        There are a number of areas that we can specifically turn to that will benefit Australian exporters. When it comes to lentils, almonds, oranges, mandarins and pears, all these products from Australia will benefit in terms of their access to the Indian market. When it comes to coal, LNG, alumina, most metallic ores, certain non-ferrous metals, manganese ores, tungsten ores and concentrates, rare earth oxides, zirconium concentrates, pharmaceutical products, certain medical devices and sandalwood—all these and more—Australian exporters will benefit.

                                        But, like any good free trade agreement, it will also benefit Indian exporters. We have to welcome that. You can't have a free trade agreement which only goes one way. Then it's not free trade. You need that agreement to benefit both economies. When it benefits both economies, it lifts both economies up. There is no more important economic player in the world today than India. India's economy continues to grow at a phenomenal rate. India continues to be more and more outward looking. India continues to understand that it has a key role to play in the Indo-Pacific and ensuring the economic development of the Indo-Pacific. That is why this agreement is so important.

                                        There have been a lot of attempts at negotiating an Australia-India free trade agreement. As a matter of fact, when I became Australia's trade minister and I floated the idea that we should have another go at it, I received phone calls from people saying: 'Don't waste your time. It's been tried and, every time, it has collapsed at the last hurdle.' But, I've got to say, when a challenge is put to you, and people say to you that you'll never be able to do something, it does inherently raise the competitive juices a little bit more, and you go: 'Well, I'd like to prove you wrong.' I give a big shout-out to my good friend Piyush Goyal, the Indian commerce minister. I know he felt exactly the same way. That is why, during the pandemic—which made it incredibly difficult—we set about the task of negotiating this free-trade agreement. We did it because we wanted to prove the naysayers wrong, to prove that we could negotiate an agreement which would benefit both countries.

                                        That's exactly what we did. Over a period of about three months, we spoke almost daily. If we didn't speak every day, we spoke every second day, to make sure that we could get this agreement done. That investment of time that Piyush put into this agreement should always be recognised. You have to remember that, for us, I was a trade minister for 25 million people; he's a commerce secretary for about 1.4 billion people. So the competition for his time is immense. But he was determined to see this agreement come to the fore, and that is exactly what took place. He needs a big shout-out when it comes to what was achieved here.

                                        We should also recognise Prime Minister Modi and former prime minister Morrison, because the unique relationship they had meant that, when the hard decisions had to be made, when we needed to discuss those very sensitive issues, we could do it knowing that our prime ministers had our back. That's incredibly important, because self-interest always comes to the fore when you are negotiating these agreements, but the support of both our leaders meant that we could put that aside and we knew that they would support us.

                                        I also want to give a shout-out to former prime minister Tony Abbott, who also has a very unique relationship with Prime Minister Modi. I made him the special envoy for trade with India, and he was able, through the pandemic, to help me in terms of the travelling to and from India to make sure we could keep progress going on this agreement. And that is exactly what we were able to do.

                                        I once again give a big shout-out to our negotiators. It was done, as I've said, through the pandemic, so a lot of the negotiations were done via Zoom or other secure links to make sure that we could keep things pushing along. We also had to travel to India three or four times during the pandemic, and that obviously brought with it its own risks. In particular, it meant that we had to do a couple of weeks quarantine when we returned home. But our negotiators had a single-mindedness in their approach to this to make sure that we got the job done. I give all of them a big shout-out, not only those on the Australian side but also those on the Indian side.

                                        I think, of all the free trade agreements that Australia has done in the last 10 to 15 years, this agreement, over time, will be seen as one of the most important. Just think about the potential of the—

                                        A division having been called in the House of Representativ es—

                                        Sitting suspended from 11 : 38 to 12 : 10

                                        Before the suspension, I was talking about the significance of this agreement for Australia's future, for India's future and for the ties between our two nations into the future. This agreement will build a foundation which I think will enhance our relationship like no other agreement that we have seen. The economic potential of both economies and the complementary nature of both economies mean that this agreement will continue to grow and grow. There is still more to be done on the economic relationship, but this is a fantastic start. I am so pleased that this report recommends that that agreement be signed and put into treaty status so we can reap the benefits of it.

                                        12:11 pm

                                        Photo of Josh WilsonJosh Wilson (Fremantle, Australian Labor Party) Share this | | Hansard source

                                        by leave—Like the member for Wannon, I'm really glad to make some remarks on Report 202: Australia-India Economic Cooperation and Trade Agreement from the Joint Standing Committee on Treaties, which recommends that Australia ratify the agreement. Indeed, that's already occurred, and the enabling legislation has passed through the House. It's a very significant agreement, as the member for Wannon was saying, and I acknowledge that he was the minister in government when the agreement was signed.

                                        It's the first agreement of its kind in 10 years that India has settled with a developed nation like Australia. It does include most favoured nation clauses, which will have the effect of ensuring that, when India settles some other trade agreements that it has under contemplation, Australia will have the same kinds of benefits that might be extended to Canada and other nations, in addition to what's been achieved by this agreement.

                                        It has been referred to as an 'early harvest' agreement. It's called an economic cooperation and trade agreement rather than a full-blown free trade agreement, and that is in acknowledgement that there's a fair bit more that can be achieved. But it is significant, and that's because India is incredibly significant on its own terms in our region and globally—but particularly for Australia. India's currently the fifth-largest economy. There's some speculation that it could overtake Germany in the course of the next year or so to become the fourth-largest economy. There's no doubt that it will become the second-largest economy in due course; it's just a matter of time. It's already the second-most populous country and will become the most populous country.

                                        The scale of India's market and economy is therefore enormous, and so the opportunities for Australian investment and export in goods and services are enormous. At this stage we have barely tapped the potential. India is, I think, our seventh-largest two-way trading partner, and there's a lot of upside in lots of areas. One example would be wine. We did have wine exports to China that were in the order of $1 billion annually, until China decided to shut that particular door. After a long, painstaking effort by wine producers and exporters in Australia, the quantum of our exports to that market still sits at only about $20 million per annum, so that gives you a sense of just how much it could grow.

                                        There are some other things about India that are significant, in relation to the nature of its population. I'm sure that people who have an interest in this trade agreement and our economic relations with India would have paid regard to the An India economic strategy to 2035 report that Peter Varghese produced in 2018. That speaks to the specific characteristics of India as a nation, in addition to its scale, that make it significant. From that report:

                                        The drivers of Indian growth are deeply structural which suggests they are also sustainable. They include the urbanisation of the world's largest rural population, the gradual movement of the informal economy, currently comprising 90 per cent of India's workers, into the formal economy, a young demographic with a mean age of 27, considerable investment in infrastructure, and the beginnings of an ambitious program to upskill 400 million Indians.

                                        That gives you a sense of how the growth that India currently experiences—somewhere in the order of six to eight per cent per annum—can be expected to be maintained for the next 20 years. The fact that they have a relatively young and unskilled population gives them some very, very significant productivity upsides but also creates some opportunities for us.

                                        Obviously, our two key service exports are tourism and education. People often think of education in terms of university education, but it includes the TAFE sector as well. India is already a significant participant in both of those, particularly education, but the scope for that to grow is really enormous. The Varghese report suggested that we could see inbound tourism from India quadruple by 2035 to 1.2 million visitors annually. That would be really significant.

                                        As the member for Wannon mentioned, there is a structural complementarity between the Australian economy and the Indian economy. Again, I'll quote from the Varghese report:

                                        Scale encourages ambition but it is the structural complementarity between the Indian and Australian economies which is the key to translating ambition into opportunities. Put simply, a growing Indian economy will need more of the things Australia is well placed to provide from education services to resources and energy; from food to health care; from tourist destinations to expertise in water and environmental management. Indeed services are likely to be the fastest growing segment of our future economic relationship with India.

                                        That's very welcome. It's quite an achievement for us to have service exports like tourism and education, but we need them to keep growing and becoming stronger over time.

                                        It's timely to make a contribution to this debate when, as the member for Wannon said, the Prime Minister is in India. It's a sign of our commitment to strengthening and advancing that relationship. The relationship doesn't just consist of an economic or trading relationship; obviously, there have been very significant people-to-people links for a long time, and they are also growing. India is not only a significant source of income and tourists but also a very significant source of migration. In most state and territory jurisdictions, India is the largest or the second-largest source of incoming migrants presently, and that's only going to make those links stronger.

                                        There are challenges in investing in and trading with India, and they haven't all been overcome through this agreement. India has a history of being wary of the impact of liberalisation, and that continues. The fact that this is the first agreement of its kind with a developed country in 10 years tells you a little bit about that. It's also the case that India, like Australia, has a federal structure, and so to some degree businesses operating in India and wanting to export into India have to manage regulations and requirements at both the national level and the state level. Some of those are difficult to deal with through agreements like this, which are negotiated and settled between the two national governments.

                                        There's no question that we have a lot to gain from a stronger economic, social, people-to-people, diplomatic, development, assistance, regional cooperation, disarmament and peace relationship with India. They are already one of the most significant nations in the Indo-Pacific. We perhaps don't talk enough about India and Indonesia with the Indo-Pacific because of the extent to which we talk about China, which is understandable up to a point. But we need to maintain our focus looking west; I say that as a Western Australian on the Indian Ocean coast. The more we can explore and strengthen the existing and future potential parts of our relationship with India, the better it will be for Australia's national interest.

                                        I'm grateful for the opportunity to speak again on this report. I welcome the recommendations that it made. As I say, we have already ratified the agreement and the enabling legislation has already passed the House.

                                        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.

                                        12:26 pm

                                        Photo of Jerome LaxaleJerome Laxale (Bennelong, Australian Labor Party) Share this | | Hansard source

                                        In November last year, our Prime Minister met with the Indian Prime Minister, Narendra Modi, to celebrate the rich connections between our two countries and our peoples. They discussed the finalisation of the economic cooperation and free trade agreement between Australia and India and its importance for expanding our economic relationship. Our two countries share a deep and abiding bond based on common values and interests and a commitment to promoting regional peace and prosperity.

                                        India's economy is just extraordinary. The opportunities in India are enormous. Its society is dynamic. Its economy is diverse. India's economy has become the world's third largest, measured in purchasing power parity, and is considered to be one of the fastest-growing large economies. India's GDP has grown from an average annual rate of less than three per cent in the 1970s to an incredible seven per cent in recent years.

                                        We have a large Indian diaspora in Australia, particularly in Bennelong. That represents a big plus for our business relationships and a big opportunity for enriching our multiculturalism. It serves as a national economic asset as well, providing a microcosm for the world, showing that people can live next door to each other in harmony, with different religions, different backgrounds and different political views. It's a great thing that, in Australia and in Bennelong, we can have all faiths living next door to each other in harmony. Our ability to all get along and relate to each other as human beings is a really strong value for us and for our nation.

                                        Because of the work our government has been doing to ensure that those values are front and centre, Australia is back at the table as a trusted partner, engaging with the world. Growing our economic trade and investment flows with India is a key priority for this government. The entry into the Australia-India Economic Cooperation and Trade Agreement in December last year takes us one step closer. This agreement is India's first free-trade agreement with a major developed country in over 10 years, and it provides Australian exporters a valuable advantage in the world's fastest-growing large economy.

                                        The quality of this agreement, in terms of market access and opportunity for Australian businesses, demonstrates India's commitment to our bilateral economic partnership. Australian businesses are already excited to take advantage of the outcomes of this ECTA. Medtech companies—and there are many of those in Bennelong—such as Connect2MyDoctor have expressed their confidence that ECTA will help make their digital health platform more accessible in India. Tariffs on premium wine to India were slashed by half from over 150 per cent to 75 per cent, dropping even further to 70 per cent on 1 January 2023 and phasing down to 25 per cent over nine years.

                                        India presents unparalleled growth opportunities for Australian businesses across a range of sectors from food and agriculture to technology—medtech, as we heard—but also, importantly, to green energy, health and education services. India's young population, economic demand and growth trajectory present enormous opportunities for our exporters. This trade agreement capitalises on this by delivering strong, immediate market access outcomes for Australia in goods and services. This agreement will eliminate tariffs on over 90 per cent of Australian goods exports to India by value. India's high tariffs on agriculture such as sheepmeat, wool, cotton, seafood, macadamia nuts and avocados will be removed. India will also substantially reduce its 150 per cent tariff on bottled wine above US$5 and has guaranteed to extend to Australia any deeper access provided to future free-trade-agreement parties.

                                        More than 6,000 diverse industries from India, including textiles, leather, furniture, jewellery and machinery, will have duty-free access to the Australian market. It presents an enormous opportunity for companies and professionals accessing the Indian market. India has guaranteed Australian service suppliers in 31 sectors and subsectors the best treatment afforded to its future trade-agreement partners, benefiting suppliers of higher and adult education, business services, R&D, communications, construction and engineering services, as well as the traditional insurance, banking, health services et cetera. As I said earlier, Bennelong has a huge, growing South Asian community, and it's a true honour to be a representative of them here in this place.

                                        It's so exciting to see Australia and India's strong people-to-people links strengthened because of this agreement. The labour mobility outcomes embedded will support trade and business and contribute to further cultural exchange. India's labour mobility commitments to Australia are consistent with the best of our existing free trade agreements. As our Prime Minister said last week, Prime Minister Modi is interested in increasing educational interaction between our two nations. He wants Australian universities to have a presence in India and Indian students to be able to study in Australian universities over there. We also encourage them to come back to Australia. I would, of course, encourage them to come to Bennelong, where Macquarie University is situated and has huge links with the Indian community.

                                        This free trade agreement and the Prime Minister's ongoing discussions with India—he's there right now—represent just the beginning of our fruitful and prosperous relationship with them. The Prime Minister's current trip to India alongside the Minister for Trade and Tourism and Minister for Resources signals our very strong commitment to our countries' relationship and to fostering our economic, social and cultural links. Later this year, our Prime Minister will also attend the G20 Summit, an important visit that will continue to upgrade the relationship between our two countries, and, of course, Prime Minister Modi will visit Australia next year for the Quad leaders meeting.

                                        The Australia-India Economic Cooperation and Trade Agreement is a significant milestone in economic relations between India and Australia. It will remove barriers to trade in goods and services, improve market access for Australian businesses and create a more transparent and predictable business environment. It's ambitious, it's comprehensive, and it will promote greater cooperation and collaboration not only in trade investment but also in education, tourism, science and technology. It will allow us to develop a stronger, more prosperous relationship between our two nations, and it's testament to our shared economic values and our deep common interests. By reducing tariffs and eliminating non-tariff barriers, we are creating a more level playing field for our businesses to compete and succeed in each other's markets.

                                        India is a fantastic economic partner, and I'm so excited to see our relationship prosper and our relationship continue. More trade is a key part of how we build the economic future in Australia that we want. Australia's open for business to India, and we're always looking at ways to create opportunities for Australian businesses to grow in India. Together we can build a more vibrant, dynamic, and prosperous future. By working together, we can harness our respective strengths and contribute to regional peace and prosperity, creating a better future for Australians and Indians across the world.

                                        Debate adjourned.