Mumbai: India and Australia will launch talks on a ''high quality" free trade agreement (FTA) next week and have agreed on a joint feasibility study to remove impediments to bilateral trade. Officials of both countries are expected to meet in New Delhi next week.
''The FTA study will consider the feasibility of a comprehensive WTO-consistent agreement covering trade in goods, services and investment," Australian trade minister Simon Crean said, adding, the study on tariff liberalisation and removal of other impediments to trade is expected to be completed next year.
The study is aimed at bringing the FTA to a stronger level of economic partnership between the two countries. FTAs, he said, can be used to bring considerable mutual economic benefits as increased trade creates more jobs and investment and enhances the pace of growth-creating economic reform.
"I am pleased that India's Prime Minister Manmohan Singh has personally approved the terms of reference. Given the complementary nature of our economies in so many areas this is an exciting prospect," he said.
India is Australia's sixth largest and fastest growing major export market. "The bilateral trading relationship is increasing in importance for both countries," he said.
Snub to China
The Australian government has rejected a Chinese suggestion of a long-term plan for Chinese investment in Australian mineral resources, saying Canberra would rather approve foreign investments on a case-by-case basis, The Weekend Australian reported quoting a government official.
A senior executive of the China Development Bank had made the suggestion that Australia and China should form a "consensus" over Chinese investment for the next 5-10 years.
"We are committed to the long-established foreign investment review framework, which operates on a case-by-case basis, governed by national interest considerations," acting treasurer and finance minister Lindsay Tanner said no such proposal had been put to the government.
"The proposal floated by the China Development Bank would involve a dramatic deviation from those principles," he added.
The report also noted that China was considering launching a $22 billion-plus bid for a stake in Melbourne-based BHP Billiton, the world's biggest mining company.
Chinese government-backed corporates this year have increased their efforts to secure Australian resources assets even as Beijing is focused on securing the huge raw material supplies needed to feed its mass urbanisation over the next 20 years.
The Australian government's clarification on its foreign investment principles comes amid fresh debate over whether these state-backed foreign investment posed a threat to the national interest.
Among others, China's Sinosteel made a hostile bid to take over West Australian iron ore company Midwest for $1.2 billion. Also, state-owned Chinalco made a $15 billion bid for a stake in Anglo-Australian mining giant Rio Tinto.
While Sinosteel's bid has been approved by the Foreign Investment Review Board, Chinalco is still waiting on its FIRB application.
BHP this week confirmed it had secured a trebling in contract hard coking coal prices to US$300 a tonne, while contract thermal coal prices have more than doubled to about $125 a tonne.
Rio and BHP are also believed to be pushing for an 85 per cent hike in contract prices of iron ore, against the 65-71 per cent increases China and Japan have agreed with Brazilian iron ore giant Vale.
Tanner, however, said there has been no slowing of the processing of FIRB applications from Chinese corporates that are looking to invest in Australian resources companies.