COMMONWEALTH OF AUSTRALIA JOINT STANDING COMMITTEE on FOREIGN AFFAIRS, DEFENCE AND TRADE (Trade Subcommittee) Reference: Australia’s trade relationship with India MELBOURNE Monday, 21 July 1997 OFFICIAL HANSARD REPORT CANBERRA JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE (Trade Subcommittee) Members: Mr Sinclair (Chair) Senator Forshaw (Deputy Chair) Senator Chapman Mr Brough Senator Childs Mr Dondas Senator Margetts Mrs Gallus Mr Hollis Mr Nugent Mr Price Mr Slipper Matter referred: Australia’s trade relationship with India and to consider the emerging economies of South Asia, and report on such areas as: India’s economic significance for Australia, and the opportunities for expanding trade and investment; the prospects for continuing economic reform and trade liberalisation in India and the implications of this for Australian trade and investment; India’s growing economic engagement with Asia and the Indian Ocean region; South Asia’s emerging economic significance for Australia, and the potential implications of closer economic cooperation amongst South Asian countries, including through the South Asian Association for Regional Cooperation; trade and investment opportunities for Australia in Pakistan, Sri Lanka and Bangladesh. WITNESSES ANAND, Mr Dinesh Dev, Senior Manager South Asia, Australia and New Zealand Banking Group, 100 Queen Street, Melbourne, Victoria 3000 . 138 BAILEY, Mr David Leonard, Vice-President, Australia India Chamber of Commerce, 11 Koornang Road, Scoresby, Victoria 3179 ............. 124 DEWAN, Mr Tim, Regional Manager, Marketing, South-East Asia, Australian Wheat Board, Ceres House, 528 Lonsdale Street, Melbourne, Victoria 3000 ................................................... 165 EMONS, Mr Mark, Regional Manager, Marketing, Middle East, Africa and Europe, Australian Wheat Board, Ceres House, 528 Lonsdale Street, Melbourne, Victoria 3000 .................................... 165 JEFFREY, Professor Robin, 514 Station Street, North Carlton, Victoria 3054 . 108 KENNAN, Mr James Harley, QC, Chair, Australia India Council, Department of Foreign Affairs and Trade, Canberra, Australian Capital Territory .... 71 MAITLAND, Mr Alister Thirlestane, International Adviser, Australia and New Zealand Banking Group, 100 Queen Street, Melbourne, Victoria 3000 ................................................... 138 MARTIN, Ms Joanne, Government Relations Manager, Australian Wheat Board, Ceres House, 528 Lonsdale Street, Melbourne, Victoria 3000 .... 165 MENDELSOHN, Associate Professor Oliver David, Member, National Centre for South Asian Studies, 4/20 Queen Street, Melbourne, Victoria 3000 .... 91 OFFICER, Mr Nigel, General Manager, International, Australian Wheat Board, Ceres House, 528 Lonsdale St, Melbourne, Victoria 3000 ....... 165 VICZIANY, Associate Professor Marika Antonia, Foundation Director, National Centre for South Asian Studies, 4/20 Queen Street, Melbourne, Victoria 3000 .............................................. 91 WAHID, Mr Shabbir, President, Australia India Chamber of Commerce, 11 Koornang Road, Scoresby, Victoria 3179 ........................ 124 WHITE, Mr Barry, Group Manager, International Wool Operations, International Wool Secretariat, Wool House, 369 Royal Parade, Parkville, Victoria ......................................... 154 JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE (Trade subcommittee) Australia’s trade relationship with India MELBOURNE Monday, 21 July 1997 Present Mr Sinclair (Chair) Senator Margetts Mr Dondas Mr Nugent Mr Price Mr Slipper The committee met at 9.32 a.m. Mr Sinclair took the chair. 69 FADT 70 JOINT Monday, 21 July 1997 CHAIR—I declare open this public hearing of the Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade. As everybody knows, we are conducting an inquiry into Australia’s trade relations with India. I was glad to see this morning that even the Australian has caught up with the fact that India is an emerging nation and that it is important that we work out where we are going with it. In particular, the inquiry is going to report on India’s significance to Australia in terms of expanded trade and investment opportunities, the prospects for continued economic reform and trade liberalisation in India and the implication of this for Australian trade and investment, and the nature of India’s growing economic engagement with Asia and the Indian Ocean region. In the course of the inquiry, the subcommittee is conducting a number of public hearings around Australia, speaking with government, business and various representative groups, as well as professional analysts of the south Asian region and individuals with experience of India’s economic environment. The committee expects to table its report on this reference early next year. FOREIGN AFFAIRS, DEFENCE AND TRADE Monday, 21 July 1997 JOINT FADT 71 KENNAN, Mr James Harley, QC, Chair, Australia India Council, Department of Foreign Affairs and Trade, Canberra, Australian Capital Territory CHAIR—Welcome, Mr Kennan. I advise you that the proceedings today are legal proceedings of the parliament and warrant the same respect which proceedings of respective houses of parliament demand. Although the subcommittee does not require you to give evidence on oath, you should be aware that this does not alter the importance of the occasion. The deliberate misleading of the subcommittee may be regarded as a contempt of parliament. The subcommittee prefers all evidence to be given in public, but should you at any stage wish to give any evidence in private, you may ask to do so and the subcommittee will give consideration to your request. I invite you to make an opening statement before we proceed to have some dialogue. Mr Kennan—Thank you, Mr Chairman. I have been asked to comment on, in addition to the Australia India Council, my views about trade and investment with India as a result of some of my private business activities in India. I want to cover two broad headings: firstly, the activities of the Australia India Council and, secondly, my views about opportunities for trade and investment between Australia and India. I think that Mr John Powys, the Director of the Secretariat of the Australia India Council, has already given evidence to the committee, and the committee is well aware of the background to the council. As the committee knows, there was a major promotion— the new horizons program promotion—by the Australian government in India last year. I think some six or seven government ministers attended in the course of that promotion and a lot of Australia India Council funding went into it. The Minister for Trade and Deputy Prime Minister launched a consultants report last week on that promotion, indicating that it had been thought to be successful by those Australian firms that participated in it. The Australia India Council was there for much of the two weeks of the promotion. It is certainly my observation that Australia’s profile was lifted very considerably during that promotion. India is no longer necessarily an easy country to get a profile into, because in recent years Delhi has become quite a hot spot for international promotions. For instance, the Canadians were there about a year ago; they came with their Prime Minister and the premier of each of the six or seven provinces. There are a lot of road shows through Delhi by various countries, and I think the Australians did well. In the course of this year the Australia India Council will shift to a number of key projects in addition to some ongoing projects, which include academic exchanges, journalist exchanges and so on. We are trying to get as much as we can for the dollars spent by seeking to involve key stakeholders on each side and by trying to concentrate our funding on seed funding that draws in other funding or support which then creates ongoing collaborations after we no longer fund a project. Through that we are trying to set FOREIGN AFFAIRS, DEFENCE AND TRADE FADT 72 JOINT Monday, 21 July 1997 up institutional links as well as one-off exchanges which have tended to characterise the activities of a number of bilateral councils in the past. We have a number of these that are currently under way. One relates to alternative dispute resolution. Whatever problems there might have been in the Australian courts, I think India has 25 million cases awaiting trial and 8,000 courts, and no formal system of alternative dispute resolution. We have made a link with the secretary of the Indian Council of Arbitration who is housed in FICCI, one of the major chambers of commerce. He has been out here and has undergone training with Leader—one of the alternative dispute resolution training bodies in Australia. Later in the year we hope to send trainers over there to set up the protocols for alternative dispute resolution and training systems in India which will then receive the support of FICCI, which has more than 25 regional offices throughout India. We will seed fund that initially, and after that it is a matter for the Indians to take up. In creating these institutional links, we have also sought to involve some high profile Australians. Sir Gustav Nossal is one. He has had a longstanding interest in India as an immunologist. He has retired from the Walter and Eliza Hall Institute but is still the President of the Australian Academy of Science. He did a round table in January in Delhi on health and biotechnology for us. We paid for other people to come from other parts of India to have