India’s position on CECA too far apart from us: Australian PM

Why in news?

  • According to a strategic report released by Australian Prime Minister, 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.


The report- ‘An India Economic Strategy to 2035’

  • It has been authored by Chancellor, University of Queensland and served as High Commissioner to India
  • According to the report, India will be the single largest growth opportunity for Australia in the next 20 years.
  • By 2035 India will overtake China as the world’s most populous country. It is poised to become the third largest economy, after China and the United States
  • It identifies ten sectors where Australia’s competitive advantages match- a flagship sector (education), three lead sectors (agribusiness, resources and tourism) and six promising sectors (energy, health, financial services, infrastructure, sport, science and innovation).
  • Calling for more focus on the states, the report says “India is best seen not as a single economy but as an aggregation of very different state economies, each growing at different rates, driven by different strengths, led in different ways and likely to continue to be uneven in their progress”.
  • The report also stated that Australia should prioritize trade negotiations with India in Regional Comprehensive Economic Partnership (RCEP) and return to CECA negotiations once an RCEP deal is concluded.
  • The report added- India’s ability to make sufficiently credible market access commitments in RCEP is constrained by its sensitivities in goods, particularly agriculture, and also by its desire to lower its trade deficit with China.
  • The report also talked about the China as a factor in strategic partnership between Australia and India.


What is Comprehensive Economic Cooperation Agreement (CECA)?

  • CECA involve tariff reduction/elimination in a phased manner on listed / all items except the negative list and tariff rate quota (TRQ) items.


What is Regional Comprehensive Economic Partnership (RCEP)?

  • Regional Comprehensive Economic Partnership (RCEP) is a comprehensive free trade agreement including goods, services, investment, competition and intellectual property rights between the a proposed free trade agreement among ASEAN + 6 FTA Partners (Australia, China, India, Japan, South Korea and New Zealand).



  • Since 2011, Australia and India have been negotiating CECA, a bilateral free trade to provide fillip to trade and investments between the countries.
  • Also during the 21st ASEAN Summit in Phnom Penh, Cambodia, the RCEP negotiations were launched in November 2012 by leaders of 10 ASEAN Member States and six ASEAN FTA partners (Australia, China, India, Japan, South Korea, and New Zealand).
  • Several rounds of negotiations have been completed for liberalising trade and services regime, besides removing non-tariff barriers and encouraging investments. But, both the sides have yet to resolve issues pertaining to goods and services.

Note: The bilateral trade between India and Australia increased to USD 18 billion in 2017-18 from USD 14.11 billion in the previous fiscal. Trade balance is highly in favour of Australia


What is difference between Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA)?

  • While in a FTA, countries cut or eliminate duties on most number of goods traded between them, in PTA countries reduce import duties on a few identified products.


Benefits of international trade agreements:

  • Simplified access to enlarged customer base;
  • Cutting  foreign market penetration costs due to the elimination, reduction or simplification of customs duties and processes and regulatory requirements;
  • Optimization of supply chain by dealing with suppliers from countries under the international agreement with your country;
  • Optimization of production operations by moving it abroad partially or completely;
  • Simplified access to foreign investors and financial institutions to satisfy financing needs better;
  • Simplified access to foreign labor force and simplified access of employees to target markets.

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