With the Chinese Communist Party (CCP) imposing a block to Australian imports and the tension over the border conflict with India has prompted the development of an economic agreement that will allow India and Australia to challenge the CCP.

As it turned out, plans for a free trade agreement between Australia and India are advancing. The measure is designed to counteract the harassment and commercial coercion of the CCP, according to analysts consulted by the South China Morning Post (SCMP).

The possibility of such a trade agreement between India and Australia began to resonate a decade ago. The climate seems ripe for negotiations. Mainly because tensions with the CCP reached levels not seen in recent decades.

As a consequence of the current situation, in November, India withdrew from the Regional Comprehensive Economic Partnership (RCE), which was formed by members of the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, Australia, and New Zealand, following concerns that the terms of the agreement were biased in favor of the CCP.

“There is a discussion about a free trade agreement, a bilateral free trade agreement also because, as you know, we did not sign the RCEP,” India’s Foreign Minister Subrahmanyam Jaishankar said on Wednesday at an event organized by the Australian-based Lowy Institute.

Both Australia and India have been involved in major disputes with the CCP in recent months, which have led both sides to push for greater cooperation between the parties. 

The CCP has recently restricted billions of dollars in Australian exports, while Chinese and Indian troops have had deadly clashes along the disputed Himalayan border.

At the same time, over the past few months the military forces of India, the United States, Australia, and Japan, formed the Quadrilateral Security Dialogue, conducted several joint military practices in the waters of the Arabian Sea, demonstrating the growing regional power they are developing to confront the influence of the Chinese Communist Party in the Indo-Pacific area.

More recently, Japan and Australia signed a new military pact in November, which fueled the tension between the two countries and the CCP and it was quick to respond about their disagreement on this issue and also warned about the danger of having signed this pact, taking into account that “it is inevitable that China will take some kind of countermeasures.”

According to Breitbart, the military agreement aims to strengthen their defense relations, especially given the constant threat from the neighboring CCP.

Vinay Kaura, assistant professor at Sardar Patel University, said in a dialogue with SCMP, “India and Australia are trying to act together to ensure that their trade is not held hostage by China’s bullying tactics. With the emergence of a new ‘Cold War,’ there is a strong possibility of decoupling of trade relations between China and many countries.”

A free trade agreement between the two countries will not be easy, considering that both countries represent important economies but neither can replace China as a buyer, especially in certain areas where they compete directly with each other, such as agriculture. In any case, the intentions are and will be a matter of negotiating and reaching agreements that are convenient and beneficial to both.