Fresh from signing a free trade deal with Indonesia this week, Australia is poised to finalise another combined trade agreement with 15 other countries by year’s end.
One of its biggest attractions in the deal is the potential to open up vast opportunities with India, where a long-anticipated free trade agreement with Australia has failed to eventuate.
Improving business relationships with Pacific countries is also a rising priority on Canberra’s trade radar.
India offers Australian businesses more potential growth opportunities in the next two decades than any other single market
India is now the world’s fastest growing major economy and already Australia’s fifth largest trading partner.
Remarkably, however, it only absorbs four per cent of our export trade.
“India offers Australian businesses more potential growth opportunities in the next two decades than any other single market,” said Department of Foreign Affairs and Trade secretary, Frances Adamson, addressing this week’s agricultural Outlook 2019.
Its burgeoning middle class was transforming the Indian economy and could be a driving factor behind new trade opportunities with Australia, particularly if the proposed Regional Comprehensive Economic Partnership is sealed.
The RCEP has similar tariff reduction ambitions to those achieved by last year’s Trans-Pacific Partnership deal.
It will involve the 10 member states of the Association of Southeast Asian Nations (ASEAN) and the six Asia-Pacific states with which ASEAN has existing free trade agreements.
RCEP’s 16 expected signatories in November or December include 10 of Australia’s top trade partners.
“The economic dynamism in the Indo-Pacific is creating new trade and investment opportunities for Australian agriculture beyond our traditional trading partners,” Ms Adamson said.
Her comments come as the outlook for Australian and global growth is actually deteriorating slightly because of rising trade tensions.
Global trade arrangements which had served Australia well were were under pressure, notably from changing US agendas, including its trade war with China.
However, Ms Adamson believed Australia could do much more to boost valuable economic relations with India, aside from formal trade deals.
Targeting agribusiness connections to service India’s food demand, was one of 10 goals identified by the trade department.
India’s growing population, now almost 1.4 billion people, would demand more food than it could supply.
This opened up opportunities for more commodity export ties and for Australia to become a leading provider of professional agricultural services.
Asia generally would propel two-thirds of global growth by 2030, by which time it would also produce more than half the world’s economic output, consume more half the world’s food and 40pc of its energy.
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“Australia’s economy will continue to complement those of a growing Asia, demanding our premium agricultural products,” she said.
Within a decade the Asian middle class would represent a consumer market greater in number and spending power than the rest of world combined.
Closer to home, the federal government wanted to boost our partnership with the Pacific to a new level.
“The Pacific is our part of the world,” Ms Adamson said.
“Our stability and prosperity are interlinked.”
The government had already expanded opportunities for Pacific workers to help meet demand in regional Australia, helping fill labour gaps in towns and on farms, thereby boosting economic activity and competitiveness.
Trade policy is becoming more complex and contested than it has been in decades,
Ms Adamson said while more trade agreements were still to be negotiated, Australia was steadily locking down a wish list of FTAs and looking to fine tune those already in place.
When current FTA negotiations were wrapped up Australia would have free trade deals covering nearly 90pc of its trade business
Negotiations with the European Union would be complex, but would eventually usher in a new era of relations with Europe - already Australia’s second biggest trading partner.
The UK - our seventh biggest trading partner and second biggest investor in Australia was also on the list “when the time is right” after Britain’s Brexit dilemma reaches some sort of conclusion.
“Trade policy is becoming more complex and contested than it has been in decades,” Ms Adamson said.
“We need to work together, pooling expertise across government and business, to stay ahead of the game.
“We have an enormous advantage - a consensus that open trade and investment settings – with effective safety nets – have given us prosperity and the formula for future prosperity.
“Having completed 27 consecutive years of economic growth, we stand tall as the 13th largest global economy despite having only the 53rd largest population.”
Australian goods and services were in high demand worldwide, supported by confidence in our strong economic and trading reputation, and quality products.
“We also remain an attractive investment destination with more than $3 trillion of foreign investment in Australia.