The winners and losers from the India trade deal

Source: Radio New Zealand

Workers, wine, and building new alliances – what New Zealand and India get from our free trade deal

It’s the free trade deal that was expected to take years more of relationship-building, but sprinted over the finish line.

Yet to be ratified by both parliaments, New Zealand’s agreement with India could be said to be very one-sided in our favour – access to 1.4 billion consumers with tariffs cut dramatically. India gets improved access for workers and students, in numbers that would seem like a drop in the bucket to such a populous country.

Yet it’s that aspect that has Kiwi politicians up in arms. Today on The Detail we look at a deal that the government has done a great job of nailing, but a poor job of explaining.

That lack of communication is especially puzzling when you consider that in order to enact ‘favoured nation’ status, we urgently need to get the ink dry on it. If the EU passes its free trade agreement with India first, any future drop in their tariffs won’t have to be matched in our deal.

Beyond trade, there’s also another aspect of the motivation behind the signing, and that’s the world’s changing geo-political scene, where countries are looking for fresh friends and alliances. New Zealand is the third Five Eyes nation to do a trade deal with India, and agreements with Canada and the US are in train.

Gaurav Sharma, a senior journalist with the RNZ Asia team, says when it comes to this deal, you can talk about immigrant visas and opportunities for students, but it’s mainly about geo-politics.

“Suddenly because of the rise of China, people have started looking at India differently,” he says.

That includes a new willingness to sit down at the table to discuss market access, but also talk about military alliances in the Indo-Pacific.

“In the last couple of years or so India has started looking at defence ties with New Zealand,” he says.

This includes visits from Indian military ships, and a visit by Prime Minister Christopher Luxon to a military base in Mumbai. He gave a speech during that visit on international security. The motive is the increasing presence of China in the Indo-Pacific region.

Sharma says there is significance in the appointment of the new Indian High Commissioner to New Zealand, Muanpuii Saiawi, who was formerly responsible for international security in Delhi. “It’s an important marker.”

He says the Indian diaspora here is over the moon with the deal – “it’s a stamp that India and New Zealand relations are moving to the next level.”

But he says there’s no hope that at some stage the agreement will make room for our dairy products, a notable omission from the deal.

“You have to realise that earlier this year India did a deal with the European Union and the US – two of the biggest marketing blocs and powerful economies in the world – they also didn’t get dairy.

“For New Zealand to think that in the next hundred years that India will open the market for dairy for New Zealand exporters, it’s not going to happen.”

New Zealand has insisted on having a clause in the agreement that if other countries at some stage get a look in, we will too. But India’s trade minister has categorically ruled out ever giving dairy concessions to any country.

Newsroom’s national affairs editor Sam Sachdeva was one of the sceptics who doubted the National government would get a deal over the line in its first term.

“I think the government, to its credit, did walk the talk. You saw multiple visits by [Trade Minister] Todd McClay, I think he said he’s been there eight, nine, 10 times … Christopher Luxon went, that was the first visit by a New Zealand Prime Minister in, it must have been close to a decade I think. Winston Peters himself went a few times. So you’ve had those political-level visits but I think there’s been other business delegations that have gone over there. That has helped kind of smooth the path.”

Many of the details of the agreement are still a mystery – until recently, even to the Labour Party which has been asked to help it pass.

Labour leader Chris Hipkins wrote to the Prime Minister this weekend expressing concern that it still hasn’t received a formal request to support it, and was only provided with a complete text of the agreement more than a month after negotiations were concluded.

“Your decision not to involve Labour at any point in the negotiation process – without consultation, despite your public assurances to the contrary – and the expectation that Labour would unconditionally support the agreement once presented with it as a fait accompli, falls short of best practice and is not in the spirit of bipartisanship,” the letter reads.

It says Labour will support it on the provision that concerns over migrant worker protections and international students are addressed, and it wants assurances over the expectations that the private sector will invest $33 billion into India over the next 15 years.

If the government’s promotion of this aim falls short, India has the right to revoke market access for the apple, honey and kiwifruit sectors.

But Sachdeva says that clause is not a hard fail line, and he doubts it will be enacted if the amount falls a bit short.

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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand