NZ-India FTA: Coalition disagreements.
The New Zealand government announced today that it has signed a comprehensive free trade agreement with India. The agreement, which will come into effect in the first half of next year, will remove tariffs on 95 percent of New Zealand’s exports and provide unprecedented access to India’s 1.4 billion-person market.
New Zealand Trade and Investment Minister Todd McClellan said the deal was “unprecedented” and would create opportunities for New Zealand exporters in India that they have never had before. The deal will create thousands of jobs and billions of dollars in additional exports.
The deal was part of a promise by the Conservative National Party-led coalition government to strike a trade deal with India in 2024, a promise the previous government failed to deliver.
However, Winston Peters, New Zealand’s Foreign Minister and leader of the New Zealand First party, warned that the deal was “neither free nor fair.” He said, “Unfortunately, this deal is bad for New Zealand. “There have been too many concessions, particularly in the area of immigration, and not enough benefits for New Zealanders, including in the dairy sector.”
The deal will facilitate the entry of some Indian workers into New Zealand, including 1,667 temporary work visas a year for the ICT, engineering, and some healthcare sectors. It also includes a working holiday scheme for 1,000 people aged 18 to 30 and allows Indian students to work up to 20 hours a week.
Peters added that the New Zealand First Party had urged its coalition partner not to rush into a low-quality deal with India, but those requests were ignored.
In contrast, McClellan insisted the deal would secure the workforce needed for the tourism and rural sectors, saying: “Trade drives economic growth. The New Zealand-India Free Trade Agreement is about looking ahead to opportunities for our exporters and allowing New Zealand companies to punch above their weight on the global stage.”
Indian Prime Minister Narendra Modi’s office said he spoke to his New Zealand counterpart, Christopher Lacso,n on Monday and the two sides agreed that the deal, signed in an “unprecedented nine-month time frame,” would deepen ties between the two countries. “The leaders agreed that the free trade agreement will be a catalyst for increased trade, investment, innovation, and shared opportunities between the two countries,” Modi’s office said in a statement. The agreement will also create “new opportunities for innovators, entrepreneurs, and farmers.”