LAWFUEL – The Australia & New Zealand Legal Newswire – The Australian Government Minister for Trade, Warren Truss, today announced that Australia and India have agreed to undertake a joint feasibility study into the merits of a free trade agreement (FTA) between the two countries.
Mr Truss said the study will provide an opportunity to consider the potential for benefits which might flow to Australia and India from an FTA.
“The study will examine the potential gains for both countries, in particular the impact a comprehensive and genuinely liberalising FTA could have on promoting economic growth, trade in goods and services, investment and other commercial linkages,” Mr Truss said.
“The relationship between Australia and India has been one of rapid growth in trade and investment.
“The FTA feasibility study is a natural extension of the Australian Government’s efforts to look at ways to tap the potential of India’s rise as a major economic power,” he said.
2006-07 preliminary figures show India is now our fourth-largest merchandise export market – recording $10.1 billion worth of exports – equivalent to six per cent of Australia’s total merchandise exports.
Mr Truss said India is also Australia’s fastest-growing major merchandise export market, increasing at more than 34 per cent per annum over the past five years.
“India is a emerging as one of the key drivers for global economic growth and its economic rise will be increasingly critical to world economic development,” he said.
“India’s middle class will especially present important opportunities for Australian business. India also stands to benefit from Australia’s significant economic strength and competencies.”
The Australian Government will consult widely in Australia, including with the States and Territories, relevant industry bodies and others stakeholders during the feasibility study.
The process will ensure that all views are taken into account in developing our position on any future FTA negotiations with India.
Mr Truss said that the Australian Government will initially hold bilateral meetings with India to discuss the study’s terms of reference. The FTA feasibility study will commence in late 2007 and is expected to be completed in 2009.
Australia’s two‑way trade in goods with India reached $11.4 billion in 2006-07, making India our ninth-largest trading partner. Services trade with India in 2006 was $1.9 billion.