Australian prime minister Scott Morrison (left) and his Indian counterpart Narendra Modi at a virtual leaders summit in June 2020.
Labor has accused the Morrison government of failing to act on a two-year-old blueprint for deepening ties with India after Australia’s new trade minister vowed to push for a free trade agreement between the two countries.
Australian exporters have been scrambling to find other markets after China – the top trading partner – clamped down on a range of imports including wine, barley, coal, and seafood over the past year.
The value of Australian exports to China decreased by $1.2bn or 10% in November, according to monthly figures released by the Australian Bureau of Statistics last week.
With no signs of an imminent breakthrough in the dispute with China, Dan Tehan, the trade minister, pledged on Wednesday to strengthen the trading relationship with India.
Tehan, who was appointed to the role in Scott Morrison’s pre-Christmas reshuffle, told the Australian newspaper India was a “great friend of Australia” and that new talks on a potential free trade agreement would be in both countries’ interest.
But the opposition accused the government of complacency about the India relationship.
It said recent evidence at Senate estimates indicated the government had implemented only one of the 20 priority recommendations from a far-reaching review into deepening economic ties with the country in 2018.
That involved the upgrade of the small Austrade presence in Kolkata into a full consulate-general.
Labor’s trade spokesperson, Madeleine King, said the report written by the former foreign affairs chief Peter Varghese had been “gathering dust” while Australia’s exports to India had fallen 18.4% in the year to June 2020.
That decline in exports overlapped with a severe shock to the Indian economy triggered by the coronavirus pandemic.
King described Tehan’s comments as a “silly-season announcement by a rookie trade minister” and said the government needed to “put in the hard yards” to open up new markets, including India.
“Mr. Tehan’s promise to recognise India’s potential simply highlights his government’s failure to implement a plan to support Australian exporters who are suffering amid China’s trade sanctions,” King said in a statement.
The Varghese report argued Australia “should set itself the goal by 2035 to lift India into its top three export markets, to make it the third-largest destination in Asia for Australian outward investment, and to bring it into the inner circle of Australia’s strategic partnerships and with people-to-people ties as close as any in Asia”.
But the report warned the opportunities available in the Indian market “will not fall into our lap”.
Of the 90 specific recommendations, 10 were classed as “priority” ones “to be implemented now”. A further 10 were priorities for the medium or long-term.
The Department of Foreign Affairs and Trade defended progress at Senate estimates hearing in October, saying the government had selected its own list of priority recommendations from the overall Varghese report.
Officials also maintained that implementation was well underway.
For example, Australia’s agricultural forecaster was focusing on providing information on “fluctuations in Indian demand for agricultural commodities imported from Australia”, said James Wiblin, the acting first assistant secretary of Dfat’s south and west Asia division.
But Guardian Australia understands officials have not yet submitted answers to Labor’s questions on notice outlining specific progress against each of the priority recommendations.
The DFAT secretary, Frances Adamson, told the hearing: “We seek to progress the economic elements of our relationship with India in much the same way that we’ve been able to progress the strategic aspects of the relationship.”
Australia and India elevated the status of their relationship to a “comprehensive strategic partnership” in June, but attempts to secure a potential trade agreement with have proven tricky in the past.
DFAT says the two countries launched negotiations for a Comprehensive Economic Cooperation Agreement (CECA) in 2011, but the most recent of nine rounds of negotiations were held in 2015.
In a virtual meeting in June this year, Morrison and Indian prime minister Narendra Modi decided to “re-engage” on a potential CECA between the two countries, while sharing a goal of expanding trade and investment flows.
The agriculture minister, David Littleproud, implicitly acknowledged the difficulty of securing a trade deal with India in an interview with Guardian Australia earlier this month.
“I think India still poses an opportunity. Whether there’s a free trade agreement or not is another thing, but I think you’ll find that we’ll continue to try and strengthen that relationship,” Littleproud said.
Attempts to diversify trading relationships have gained in urgency amid growing tensions with China, which has been angered by the Morrison government’s call for a Covid-19 inquiry but also a range of other issues such as the ban of Chinese telco Huawei from the 5G network and criticism of China’s human rights record.
The ABS said the decline in exports to China last month was driven by a 7% decrease in the quantity of iron ore shipped to the country.
The ABS said red table wine exports were also down – a sector that has been targeted by China’s anti-dumping investigations.
It said after increases in October, thermal coal exports decreased 63% and hard coking coal decreased 70% in November. More than 50 Australian coal ships are still stranded off China’s coast.