The India-Australia free trade agreement, signed in a record time of about six months after negotiations were re-launched in September last year, may not get ratified before the year-end.
The Australian federal elections are scheduled later this month and once the new government is in place it could take over six months for all parliamentary proceedings and domestic procedures to be completed for the pact to be enforced, according to sources.
However, there is unlikely to be any political opposition to the free trade pact, officially called the Australia-India Economic Cooperation and Trade Agreement (ECTA), even if the opposition is voted to power, a source tracking the matter told BusinessLine.
“Support for India in the country is bipartisan and as controversial elements such as investment agreement and Investor State Dispute Settlement have been kept out of the report, it is unlikely that a new government would not be willing to go ahead with the agreement,” the source added.
Boosting bilateral trade
The free trade pact is likely to almost double bilateral trade in goods to $50 billion in five years from about $27 billion at present, per government estimates.
While the Australia-India ECTA has already been tabled in the Australian Parliament on April 4, it will next have to be considered by the Joint Standing Committee on Treaties (JSCOT), the source added.
Treaties are required to be tabled for 15 or 20 joint sitting days (days on which both Houses of Parliament are in session). “JSCOT will table its report on the treaty within the 15 or 20 joint sitting days. The report will contain JSCOT’s recommendation as to whether binding treaty action should be taken. Lead agencies should allow around four to six months for this step,” according to information shared by the Australian Department of Foreign Affairs and Trade on its web-site.
Once the domestic procedures have been completed, Australia and India will provide each other with confirmation of their completion through an exchange of diplomatic notes, and the agreement will enter into force 30 days later, or on any other date that is mutually agreed, it added.