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New Zealand to put ’every single effort’ into getting free trade deal with India

RNZ | 4 December 2023

New Zealand to put ’every single effort’ into getting free trade deal with India

by Katie Scotcher

A trade expert is sceptical about New Zealand’s ability to lock in a free trade agreement with India within three years.

Prime Minister Christopher Luxon made the ambitious commitment during the election campaign.

Now in government, the new trade minister, National’s Todd McClay, said locking in a trade deal with India within three years was possible.

"We’re going to put every single effort into it that we can.

"We just can’t afford to let New Zealand be left behind when it comes to ... access and fair access to a market of 1.4 billion people whose ... economy is growing so very, very quickly.

"If we don’t get a trade deal I’ll give you a guarantee at some time in the future India will be buying dairy products from Europe, not New Zealand and it’s not good enough for New Zealand."

AUT economics lecturer and trade expert Rahul Sen was sceptical that a deal with India could be reached within three years.

"I would be cautiously optimistic to think that we can get an agreement in three years, but we could definitely lay the foundations to create an agreement."

The government needed to focus on strengthening its ties with India first, Sen added.

"Where the relations are at the moment, I think there’s a lot more work to do at the government to government level to build up back that relationship."

McLay was hoping to travel to India before Christmas, while Luxon had promised to visit in his first year in government.

The laser focus on securing a free trade agreement with India is a shift in position from the previous Labour government.

During the visit of Indian External Affairs Minister Subrahmanyam Jaishankar to New Zealand last year, Foreign Affairs Minister Nanaia Mahuta said that "a fair trade agreement at this time is not a priority for New Zealand or India".

New Zealand first started negotiating a trade deal with India in 2010, under Sir John Key’s government. But after five years, talks stalled and there had been little movement since.

McClay, who was associate trade minister at the time, said a lot had changed.

"The projections are that India is not far away from never being able to produce enough dairy to feed their own people. They are going to have to get this high-quality protein from somewhere in the world and they will look towards the countries they have trade deals with to do that, not the countries they don’t have deals with.

"That’s why New Zealand has to be at the table and start that conversation."

But dairy - New Zealand’s largest export - would likely be a stumbling block.

India has one of the world’s largest dairy sectors and wants to protect it.

In fact, India’s position on the sector is so staunch, it signed an early-stage deal with Australia last year that excluded dairy entirely.

McClay was asked if he would be willing to make the same concession.

"Having been a previous negotiator involved in the negotiation to form the coalition government, it just doesn’t make any sense to be talking about these things in public. But ultimately, what we’ve said is everything has to be back on the table if we are to do justice to the people of India and the people of New Zealand."

 source: RNZ