Historic free trade agreements with India and the UK are a step closer with Federal Parliament signing off on both deals.
Editor’s note: This article was changed to reflect India ratifying the trade deal.
In a joint statement, Prime Minister Anthony Albanese and Trade Minister Don Farrell said on Tuesday (November 22) Australian exporters, businesses, workers and consumers would soon be able to reap the opportunities and benefits of more open trade with India and the UK after relevant legislation passed Parliament.
A week later on November 30, the Government confirmed that India had also ratified the agreement, which would come into force on December 29.
The Australia-India Economic Cooperation and Trade Agreement (ECTA) will allow Australian businesses to open up new markets to reach around 1.4 billion consumers in the world’s fastest-growing major economy.
Tariffs on 85 per cent of Australia’s exports to India will be eliminated and high tariffs on a further 5 per cent of goods will be phased down. Entry into force of the agreement before the New Year delivers a double bonus of two tariff cuts in quick succession: one as the agreement comes into effect and a second on January 1, 2023.
ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and business will save around $500 million in tariffs on imports of finished goods, and inputs to our manufacturing sector.
Meanwhile, the Australia-United Kingdom Free Trade Agreement (A-UKFTA) is the first full trade agreement the UK has negotiated from scratch following Brexit and will deepen Australia’s already strong economic relationship with the UK and offer greater opportunities for our businesses to diversify their trade markets.
The UK is yet to ratify the deal.
The joint statement said the ECTA and A-UKFTA will enter into force 30 days (or another mutually agreed time) after the respective parties have confirmed in writing that they have completed their domestic requirements.
India deal a precursor to FTA
Australia India Business Council National Chair Jodi McKay said the ECTA was the precursor to a full trade agreement with India that would hopefully be finalised next year.
“The (ECTA) agreement obviously helps with a whole range of reducing or eliminating tariffs, but think more generally, it’s important in raising the profile of the India-Australia relationship,” she said during a two-day visit to Perth this week.
“What that says is that there is an agreement between both countries that there is mutual benefit in bilateral trade, and it just takes it to a whole a whole new level.”
McKay said India was a “long-term relationship” and while there was growing investment interest among start-ups and smaller companies, she hoped the FTA was an instigator of more corporate interest.
Michael Carter, head of CCIWA’s International Trade and Investment Centre, said sign off by the Federal Parliament on both deals was “a pre-Christmas bonus for WA exporters and importers.
“These new trade agreements, when in force soon, will significantly boost our already existing bilateral trade and investment relationship across a range of sectors,” he said.
Carter added: “CCIWA’s experienced and well-connected international trade team remain poised to assist WA businesses to identify trade and investment opportunities of doing business in two of the largest economies in the world.”
CCIWA’s International Trade and Investment Centre (ITIC) helps businesses reduce the time, cost and risk of going global. Contact the team for a free consultation on (08) 9365 7620 or via email@example.com.