Australia to push for new free trade deal with Gulf region

The GCC Ministerial Council announced in March last year that it was willing to resume free trade talks with foreign governments.

Australian trade minister Andrew Robb is set to visit the Gulf. Peter Parks / AFP

The Australian trade minister Andrew Robb will visit the UAE early this month to urge the government to support its efforts for a new free trade agreement with the Arabian Gulf region.

Negotiations, begun in 2005, between Australia and the UAE came close to producing a deal, but were suspended in 2009 after the GCC decided that its members could reach new deals only through multilateral negotiations.

In the wake of new free trade deals the Australian government signed with Japan and China, the trade minister is embarking on a tour of the Arabian Gulf to sign the region up to new trade liberalisation measures.

“The free trade agreement we want with the GCC would be comprehensive,” said Pablo Kang, Australia’s ambassador to the UAE.

“It would cover all sectors, and would not have any specific carve-outs [exemptions].

“The main purpose is to lower tariffs – we always try to lower tariffs to zero.”

Mr Robb will visit the UAE’s sovereign wealth funds next month in a bid to convince them that the investment benefits flowing from a new agreement would be considerable. “A free trade agreement will help to facilitate more investment by reducing some of the processes and procedures around investments, making it easier to invest,” Mr Kang said.

“You can’t talk about trade without talking about investment,” he said. “What we’re trying to offer is preferential access that [Gulf states] wouldn’t ordinarily get.”

UAE investment in Australia totalled A$17 billion (Dh47.45bn) last year.

A spate of privatisations under the Australian prime minister Tony Abbott has increased the country’s appetite for foreign capital. In New South Wales, the high-profile sale of state-owned electricity assets, known as “poles and wires” in Australian political debate, has come to illustrate the privatising instincts of the incumbent national administration.

This means that the country is actively courting Gulf investors to help renew Australia’s infrastructure.

“Lack of capital, the size of infrastructure, coupled with a long record of economic growth, that means infrastructure demands are always outstripping our capacity to service them,” Mr Kang said. “That’s why the government is very big on public-private partnerships, and very big on attracting foreign capital to projects. There simply isn’t enough domestic money to go around.”

Motor vehicles and food were the Australian products imported in the greatest quantity by UAE residents. Food imports grew 36 per cent year on year.

“If you look at any market for halal-certified meat, Australia is right up there with the best of them,” said Gerard Seeber, senior Australian trade commissioner for the Middle East region.

Recent trade deals with China, Japan and Korea mean that UAE companies in Australia can gain preferential access to these markets, Mr Kang pointed out. The GCC has not signed trade agreements with these nations.

A new trade deal would also cause Australian companies to look again at investing in the Gulf, Australia’s 10th largest merchandise trade partner.

“Australian business have been good at looking north, but not so good at looking to the Gulf,” Mr Kang said. “There’s certainly room to grow.”

Follow The National's Business section on Twitter