India & UK Free Trade Agreements will enable trade diversification and growth

Published on Mon 21 November 2022 12:06pm

Both of these agreements are especially timely at a point where Australia needs to enable trade diversification as much as trade growth. The effective ratification of the agreements before the end of the year will mean that Australian exporting businesses will get two closely successive tariff cuts.

Mr Wilson (12:06pm) – I’m very happy to speak in support of the bills, which implement Australia’s commitments under the Australian-India Economic Cooperation and Trade Agreement and under the Australia-United Kingdom Free Trade Agreement. The free trade agreements with India and the United Kingdom are in their own ways of very substantial value to Australia. They are built upon the depth and quality of the relationship between Australia and India and between Australia and the United Kingdom. Those relationships include considerable person-to-person links. They include complementary trade and investment interests, an important shared history of international engagement and cooperation, and a shared commitment to dealing with a range of strategic economic and environmental challenges, none of which can be handled without concerted and collaborative efforts.

The suite of legislation we debate here today forms a key requirement for the timely ratification of these agreements, which the Albanese Labor government is absolutely focused on delivering. It is a further instalment of Australia’s consistent performance as an active and reliable trading partner. I will pick up a couple of things that the member for Page said. In the last couple of months there has been a slightly odd effort by those opposite, some of whom know the process around these things well enough to realise that the effort they have been engaged is faintly ridiculous. The effort has been to somehow suggest that the current government isn’t moving quickly enough to see the ratification of these agreements. Of course that’s just rubbish. We have in this country and in this parliament a committee process that helps give us the highest quality agreement-making that the Australia community can expect. It does involve the Joint Standing Committee on Treaties. That committee, which I chair, expedited the consideration of these agreements and has ensured that the reports have been tailored in order for the legislation to come before the parliament and for the agreements to be ratified. So the idea that this has somehow been anything less then focused, timely action by the Albanese Labor government is just a made-up fairy tale perpetrated, prosecuted by those opposite.

Both of these agreements are especially timely at a point where Australia needs to enable trade diversification as much as trade growth. The effective ratification of the agreements before the end of the year will mean that Australian exporting businesses will get two closely successive tariff cuts. The first will apply on entry into force, and the second will occur on 1 January next year. That double tariff cut, needless to say, should be a welcome end-of-year prospect for Australian export businesses. They have faced choppy waters in the wake of the pandemic and, unfortunately, in the aftermath of China’s geo-economic coercion.

For a range of sectors around this nation the double tariff-cut will provide either an immediate boost or the prospect, in the short order, of opening up new opportunities as we head into 2023 and beyond. In addition to the benefit of tariff reductions and increased tariff-free quotas in some areas, the India and UK agreements serve to diversify and deepen Australia’s set of trading relationships. There’s no doubt that within our Indo-Pacific region India represents an absolutely critical international partnership for Australia for lots of reasons, with a huge potential to be realised between our two nations in the decade to come.

It’s worth noting that for India this agreement is the country’s first free trade agreement with a major developed country in over 10 years. That goes to show how significant it is for India and how precious this kind of agreement is. It shows you the extent to which it is a long sought after and hard-won achievement. The negotiations on which it is based began back in 2011, more than a decade ago.

It has been the commendable work of the Department of Foreign Affairs and Trade and ministers on both sides over many years which has led us here today. Putting the silly partisan games aside, I would like to acknowledge the work by the member for Wannon, the former Minister for Trade, who signed this agreement. He signed it in April this year and, indeed, he signed the UK agreement. He signed that agreement virtually in 2021 in the circumstances of the pandemic. I am sure that the member for Page, if he had his time again, and other people, would stand up and note that the negotiations began under the former Labor government back in 2011. They’re being delivered, of course, by this Labor government—

An opposition member interjecting—

I don’t remember that being mentioned, but I’m sure from this point on that will be mentioned.

This agreement eliminates tariffs on over 90 per cent of Australian goods exports by value to India. It provides new opportunities for Australian services, companies and professionals who seek to access the Indian market. It has already shown the way towards a more ambitious agreement between Australia and India in the form of the comprehensive economic cooperation agreement, which we hope will continue to advance towards completion.

This agreement is very, very significant. It is the first that India has settled with a developed nation inside of 10 years. It is something we have worked on for more than 11 years. It is very, very significant. But it is, nevertheless, what’s regarded as an early harvest agreement, a stepping stone towards that full agreement, which we look forward to and certainly Australian businesses look forward to.

There is no question that India is embarking on a new approach, an approach that does involve greater trade ambition. It has set its sights on free trade agreements with the UK, the EU and Canada, among others. Crucially though this agreement ensures that Australia will not be excluded or left behind from any improved trade and market access that might follow from new agreements that India negotiates themselves in the future. This agreement will open up more opportunities for trade, services and people to people connections for us here.

The Labor government has been clear in its first six months of operation—six months today—that building our relationship with India is a top priority. Next year the Prime Minister will visit India twice to build closer economic ties and take part in the G20, which will be hosted by India. Our positive security partnership will also develop when Prime Minister Modi visits Australia for the Quad partnership meeting in 2023. Steps like the AI-ECTA—which is the slightly awkward acronym we’re giving to this agreement—will contribute to bridging gaps between our two nations as trading partners but also more broadly as communities within the Indo-Pacific.

As a Western Australian, I’m really glad to represent the state that feels a natural connection to the Indian Ocean rim. It’s important that we recognise the significance and enormous potential of our cultural, diplomatic, defence and trade relationships with not just India but also Indonesia. On the current trajectory, it’s likely that by 2045 India and Indonesia will be the third and fourth ranked global economies respectively. While we, understandably, talk a lot about the economic significance of China as our largest trading partner, I think we sometimes forget the significance, or we undervalue and under-emphasise the significance, of both India and Indonesia. The reality is we’ve only just begun to explore the trade and investment opportunities between Australia and both of these critical Indo-Pacific partners.

Just to take an example, the export of wine. We had a wine export to China that was in the hundreds and hundreds of millions of dollars, which, unfortunately, has been affected by the approach that China has chosen to take—a self-limiting and self-harming approach from the point of view of their consumers but obviously harmful from the point of view of Australian wine exporters. At the moment, total wine exports to India total only $20 million, as compared to more than $500 million to China. That’s why ensuring that we do even better than the agreement negotiated by the previous government with respect to wine is so important, because, frankly, wine exporters in this country will tell you that it hasn’t really opened the door for them in the way that they would like, and that’s a market of enormous potential.

I’m happy to say that India has been a shaping influence in my life. I lived in Maharashtra with my family for a year when I was eight. It was the first place I travelled under my own steam when I was 20. An aspect of Indian history was a focus of my masters work at the University of Melbourne. I was fortunate to be an Asialink scholar in New Delhi in 1999 and to visit again 20 years later, in 2019, as the deputy chair of the energy and environment committee. Indian migration is one of the strongest threads of new multicultural vibrancy in my electorate; there’s no doubt about that. I’m glad that, in the Western Australian parliament, the McGowan government includes four members with Indian heritage, including Kevin Michel, Dr Jags Krishnan and Yaz Mubarakai, a very good friend of mine whose seat falls partly within the federal division of Fremantle.

I want to turn briefly to the Australia-UK FTA and its enabling legislation. This agreement is Australia’s most ambitious free trade agreement with any country other than New Zealand. It reflects the longstanding importance, quality and depth of the political, cultural and economic relationship between Australia and the UK, while setting a framework for future trade and cooperation. It comes at a significant time, obviously, considering what’s happened between the UK and the EU. As the UK made the decision to Brexit—if that’s the appropriate verb—it’s given us the opportunity to settle this deal. Obviously, we have the trade agreement under negotiation between ourselves and the EU, which will also be very significant.

The bills before the House that we’re debating here implement customs and tariff commitments made in both the trade agreements and also, critically, the administrative rules; penalties in respect of the export and import of goods; and the agreed tariff rates. When this legislation passes—as I hope it will, first here and then in the other place—and the agreement enters into force, it will mean, as the member for Page observed, that 99 per cent of Australian goods by value will be able to enter the UK duty free. Farmers and agricultural exporters to the UK will benefit in some areas—not in all areas but in some areas—from a progressive reduction in tariffs and barriers, making our exports more competitive. The liberalisation of access in a range of areas will be much stronger and more attractive for Australian exporters.

Beyond the welcome reduction of trade and investment barriers, there are a number of other outcomes which I will indicate. This agreement has a world-first chapter dedicated to promoting innovation and an Australian-first chapter that looks to enhance women’s access to the full benefits of trade and investment. These are features of what we call WTO-plus agreements. They go well past what was traditionally included in trade and investment agreements. They include commitments on tackling modern slavery and also on labour standards, which are important.

Above all, an element of this agreement which I think shines through and is distinctive is that there are provisions in the agreement to advance Indigenous interests and open new opportunities for First Nations exporters, and that was certainly a focus of the conversation in the Joint Standing Committee on Treaties. It’s notable that the highest proportion of eligible resales of art, particularly First Nations art, in the UK has lacked the protection or the benefit of the kind of resale royalty arrangements that the previous Labor government put in place domestically here, and this agreement puts us on the path to ensuring that those reciprocal arrangements will be in place so that Australian artists benefit when their work is resold. Other provisions include commitments from the UK to recognise the importance of genetic resources, traditional knowledge and cultural expression. These provisions are important for the agreement, but there’s more work to be done. I welcome, and I’m sure everyone here will welcome, the fact that the foreign minister has set out the Labor government’s intention for there to be a specific First Nations foreign policy, with the recruitment of an ambassador for First Nations people who will lead efforts to embed Indigenous perspectives, experiences and interests right across the full range of our external affairs engagements.

In closing, these two agreements have been years in the making through patient determination by Australia and through strong collaboration between Australia and our partners, both India and the UK. They are the result of successful negotiations which have taken place over many years by hardworking officials in the Department of Foreign Affairs and Trade and by ministers past and present; I acknowledge the member for Wannon here in the chamber. Their progress in negotiation through government, parliament and the treaties committee and now the enabling legislation in this place has enabled multipartisan consideration, which is proper, and, hopefully following this debate, support in this House and support in the other place.

As I noted earlier, the federal election in May caused a pause in the consideration of the agreements, one of which was only signed in April, but it’s been appropriate that the government actually sought for the agreements to be dealt with properly and expeditiously through the JSCOT and through the treaty agreement. There have been some people suggesting that’s not been the case. That’s absolutely what’s happened, and it means that Australia delivers on its commitments, and it signals to our partners that this government is serious and committed to seeking far-reaching, ambitious trade agreements.

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