Indian FTA must not include immigration

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Australia is set to resume negotiations with India with regard to a free-trade agreement (FTA). The two nations had initially commenced discussions on a trade deal in 2011, but the negotiations stalled in 2015.

Trade Minister Dan Tehan has advised that India’s Commerce Minister Piyush Goyal has agreed to resume negotiations after a recent meeting with former prime minister Tony Abbott in New Delhi:

The new negotiations are likely to begin within weeks, but Mr Tehan would not put a timeframe on when an agreement might be struck, saying only Australia wanted to cement a deal “in the near future”.

The original CECA negotiations foundered partly because India – which has a long history of protectionism – resisted Australia’s demands for greater market access for its agricultural exports.

Meanwhile Indian negotiators were frustrated that Australia refused to liberalise visa conditions for Indians who wanted to work in Australia.

As noted above, a key reason why the Indian FTA failed the first time around was because Australia refused to give open access to Indians wanting to work in Australia. At the time, Indians were behind much of the rorting of Australia’s ‘skilled’ visa and student visa systems, as documented by ABC 7.30 Report [I strongly urge you to watch the below damning video]:

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NICK MCKENZIE: The visa scam came as little surprise to Jasvinder Sidhu. He knows of many Indians who’ve paid large cash sums to corruptly obtained skilled or student visas in an effort to get permanent residency.

JASVINDER SIDHU: I’ve been hearing it eight, nine years and the last time I heard was last week when somebody paid $45,000 cash.

NICK MCKENZIE: Now Sidhu is determined to expose what he’s learned about Australia’s immigration underworld.

JASVINDER SIDHU: These people will then create your fake timesheets, fake pay slips and they will pay in your bank account and obviously everything else will also be fake, which is superannuation and other related documents.

NICK MCKENZIE: So you’re paying for a fake, a phantom job and in return you get your skilled visa?

JASVINDER SIDHU: Yes. So you are paying extra to get or create a job which doesn’t exist and to create a service which was never delivered and you’re getting permanent residency, which is not fake. This is a real output…

There’s a corruption from top to bottom. Thousands and thousands of people are being sponsored and they’re all fake. And the whole system cannot work that smoothly if there’s no corruption… This is a huge level of corruption and it is so widespread.

The fact of the matter is that immigration should never be included in FTAs to begin with. Immigration is covered in Australia’s ‘Migration Programme’, and there is little sense in negotiating away control of our sovereign borders to another nation – and in the process diluting Australian wages and working conditions – for slightly improved market access.

FTAs should be for trade and nothing else. Leave immigration out these agreements.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.