Within hours of landing in New Delhi, Prime Minister Christopher Luxon and his trade delegation had already chalked up an early win: India had agreed to resume negotiations.
Trade Minister Todd McClay had travelled ahead of the delegation and spent the day thrashing out how the two sides might be able to work through issues which stalled the previous round.
The agreement appeared to be a genuine breakthrough, with the Prime Minister’s imminent meeting with India’s top diplomat, S. Jaishankar, acting as a crunch point for a final decision.
It was unexpected enough that the New Zealand side did not have a press release ready to publish when news of negotiations broke on an Indian government website.
“On the eve of the bilateral meeting between [Luxon and Prime Minister Narendra Modi] the two nations are pleased to announce the launch of negotiations for a comprehensive and mutually beneficial India-New Zealand Free Trade Agreement negotiations,” it said.
A pre-scheduled press conference with Luxon in India was brought forward a few hours, so he and McClay could answer questions about the announcement.
Details were sparse. Negotiations tend to be confidential and McClay did not reveal how he had convinced the Indian negotiators these trade talks wouldn’t end in another stalemate.
In 2010, John Key’s government launched a negotiation which ran for six years before being put on ice. Reports suggest India wouldn’t budge on dairy access, while New Zealand was unwilling to offer enough work visas.
The two sides wouldn’t be restarting talks today unless they saw those problems as being solvable. Neither McClay or Luxon would comment on what will happen with dairy.
“What I can guarantee, is that Todd McClay and myself will work incredibly hard to make sure we can get the best possible deal for New Zealanders,” Luxon told reporters instead.
McClay said this would be a fresh set of negotiations and not a continuation of the process which ended in 2016. This means it will require “many” rounds of talks, with the first starting next month.
Speaking prior to the announcement, Sense Partners’ trade expert John Ballingall said it might be possible to strike a deal that included future benefits for the dairy industry.
“While dairy will be challenging, our negotiators will undoubtedly have some cunning plans to position NZ as an import option for the future should India’s supply and demand balance shift,” he said.
This could mean making sure NZ wasn’t disadvantaged relative to competitors, or committing to a review in the future — when India’s dairy industry has had time to modernise.
US tariffs
McClay also announced he’d had a 45-minute phone call with Jamieson Greer, a top trade official in US President Donald Trump’s cabinet, earlier in the week.
This discussion comes as Trump’s team prepares to implement reciprocal tariffs on all countries starting next month. The US President’s recent speech to Congress specifically called out India as a key target of this policy.
“India charges us 100 per cent tariffs; the system is not fair to the US, it never was. On April 2, reciprocal tariffs kick in. Whatever they tax us, we will tax them. If they use non-monetary tariffs to keep us out of their market, then we will use non-monetary barriers to keep them out of our market,” he said.
New Zealand mostly has lower tariffs on American imports than the US does on Kiwi ones, but Trump’s promise to consider other trade practices adds uncertainty and risk.
McClay said the call was the first formal opportunity to speak with the newly-appointed Trade Representative and discuss the administration's new trade policies.
“We didn't get into any detail over tariffs, but certainly made the case for why New Zealand respects the rules, we don't change our currency, we don't put in place barriers to exclude others, and that we abide by those rules,” he said.
3 Comments
Forget dairy for now and get some sheep meat sold to India.
As an aside Luxon may like to avail himself of India's stance on the war in Ukraine now that I see NZ has joined the coalition of the willing. I always thought we were doing our bit in training Ukrainian forces. Perhaps this was Luxon;s opportunity to emphasise that, if he was ever aware of it. A reminder of the Indian Foreign Minister ( External Affairs in Indian terms) Jaishshankar's statement. "“Europe has to grow out of the mindset
that Europe's problems are the world's problems but the world's problems are not Europe's problems.”
Very easy for Jaishshankar to say that while India are getting cheap Russian oil while Europe clambours along with less gas capacity from the nordstream pipeline from Russia. And Political tensions relatively high.
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