Former Australian prime minister Tony Abbott arrived in Delhi on August 2, on a four-day tour to meet with ministers and business leaders. Abbott was sent as Australian PM Scott Morrison’s “Special Trade Envoy for India”, in a bid to revive India-Australia trade talks.
In an article published by the Guardian, it was revealed that the Morrison government would spend about $19,000 to send former prime minister Tony Abbott on a trade mission to India. Moreover, according to the Department of Foreign Affairs and Trade spokesperson of Australia, Abbott signed a conflict of interest declaration as he continued to serve as a trade adviser to the British government.
Dan Tehan, who serves as Australia’s Minister for Education and Youth, hailed Abbott’s meetings with the government and business leaders of India as a chance to move forward Australia’s ambitious agenda of increasing trade and investment ties with India. Earlier this month, Tehan declared that the government would partially support Abbott’s visit to India in early August, to advance the significant economic and trade relationship. Abbott will not receive any compensation for the work.
Why Abbott?
Before he was ousted from the top job by Malcolm Turnbull in 2015, Abbott forged a working relationship with the Indian prime minister, Narendra Modi. However, despite Abbott’s previous promises of rapidly establishing a free trade deal between Australia and India, the Comprehensive Economic Cooperation Agreement (CECA) never came to fruition. CECA has been suspended since 2015, and has made no visible progress after an agreement was reached between Modi and his Australian counterpart Morrison in June 2020.
According to the Guardian, Australian Labor’s trade spokesperson, Madeleine King said, “It is inconceivable that the government couldn’t find anyone better to advocate for one of most important trading relationships with the most potential than Tony Abbott – the prime minister they booted out.”
“The board and its advisers take a collaborative approach, focused on promoting the UK regions as destinations to trade and do business with,” says a British government website, which lists Abbott as one of the advisers, according to the Guardian.
What is CECA?
India and Australia are increasing their trade and investment connections in order to further enhance their economic cooperation in light of their commitment to elevate their collaboration to a comprehensive strategic partnership. However, market access is critical for both nations to thrive, thus promoting the CECA discussions with Australia, which have been delayed since 2015 after nine rounds owing to Regional Comprehensive Economic Partnership (RCEP) negotiations.
After Malcolm Turnbull deposed Abbott in 2015, momentum on the CECA discussions stalled, especially as negotiations on the 16-nation ASEAN-led RCEP, which included Australia and India, heated up. The Hindu reports that Abbott has been particularly critical of the RCEP deal, which is set to enter into force on January 1, 2022, and labelled it the “trade arm of China’s Belt and Road Initiative.”
In an interview with the Hindu in June, Barry O’Farrell, the Australian High Commissioner stated that CECA negotiations may resume once the date for Australian Trade Minister Dan Tehan’s upcoming visit to Delhi is finalised. O’Farrell stated that in order for the discussions to proceed, the Indian industry “must be persuaded” of the benefits of the CECA, implying that local firms in the country might be a barrier to the free trade deal.
According to the Financial Express, Australia can work with the present Indian government to create more employment in labour-intensive sectors such as electronics, food processing parks and textile hubs, as well as in furniture, kitchenware and other light manufacturing industries. It is essential that tariff lines for commodities and minerals be flexible because of the Indian economy and its e-mobility initiative. Regardless of the tariff lines it selects, Australia’s need for refined petroleum, pharmaceuticals, railway carriages, jewels and jewellery, auto components, and made-up textile products will ensure accommodation.
Additionally, Australia must acknowledge the value India places on partners by implementing rules that facilitate physical travel, such as on-arrival visas and multiple entry long-term business visas. Australia is an excellent strategic partner for India as it strives for transformational and inclusive economic growth. Australia will need to take into account Indian sensitivities by not demanding substantially lowered tariffs across the board for fruits, dairy, agriculture and processed food items and narrow its ambitions down to selected, niche items.
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The Visit
According to the foreign ministry, Modi and Abbott discussed methods to boost bilateral trade, investments, and economic cooperation in order to realise the full potential of the bilateral comprehensive strategic partnership, which was formed during a virtual summit in June. The Hindustan Times reports that the leaders stated the importance of economic cooperation. “They emphasized that enhanced economic cooperation between India and Australia would help both countries better address the economic challenges emerging out of the Covid-19 pandemic, and would also help them in realising their shared vision of a stable, secure and prosperous Indo-Pacific region,” the ministry said in a statement. They also reiterated their shared goal of a peaceful, stable, and wealthy Indo-Pacific region.
The prime minister was reportedly pleased with the visit.“Delighted to meet Tony Abbott, Special Envoy of PM Scott Morrison. Had a good conversation on ways to further strengthen our Comprehensive Strategic Partnership. Also discussed the steps needed to energise our trade and economic relationship and boost people-to-people ties,” Modi tweeted.
Following the virtual summit last year, the bilateral relationship was elevated to a comprehensive strategic partnership, where the two sides committed to promoting expanded trade and investment flows, and restarting the CECA negotiations. From May 2011 to September 2015, India and Australia have held nine rounds of CECA negotiations.
At the summit, India and Australia upgraded their 2+2 foreign affairs and defence dialogue to the ministerial level, and signed seven agreements. In addition to defence and rare earth minerals, the agreement contains a Mutual Logistics Support Agreement, which will facilitate reciprocal access to military logistic facilities, enhance military exercises, and improve interoperability between the two nations’ armed forces.
