But the path remains thorny and slippery
Venkat Raman
Trade and Export Growth Minister remains hopeful that India will eventually move towards a Free Trade Agreement, although he is aware of the stumbling blocks and the lukewarm response of the Indian government towards such a pact.
“New Zealand is open to the rest of the world and we hope that India will join us because when there is two-way trade, both parties win,” he said speaking to the members and guests of the India New Zealand Business Council (INZBC) last week.
The meeting, attended by New Zealand’s High Commissioner to India Joanna Kempkers, ASEAN New Zealand Business Council Chairman Kenneth Leong and members and guests of INZBC, was held at Heritage Hotel on Friday, May 25, 2018 under its monthly ‘India Unplugged’ Programme.
Stagnant Trade
As well as the usual rhetoric about ‘Shared values of Democracy, Independent Judicial System and Love for Cricket,’ Mr Parker described the two-way trade relationship of $2.6 billion as ‘significant growth,’ although that figure, pales when compared to that of China, standing at $26.1 billion as at the end of last year.
While a Free Trade Agreement with India was mooted by the Labour government in 2007, the next nine years saw little progress when National was in charge, although there have been at least ten rounds of talks, the last of which was held in 2015.
But Mr Parker sounded optimistic at the INZBC meeting.
High tariffs
“We have several comparative advantages in signing a Free Trade pact or a Comprehensive Economic Partnership (CEP). We are doing well in Agriculture, infrastructure and technology, apart from other areas and hence we will try to achieve mutual advantage in expanding trade ties with India,” he said.
He bemoaned the declining exports to India since 2011 and citing ‘the extremely high import tariffs imposed by the Indian government as a deterrent.
“About 140 New Zealand companies are currently doing business with India. We are finding ways and means of closer engagement with India,” Mr Parker said.
It would be no comfort for the Indian government to note that New Zealand’s CEP with the People’s Republic of China is expected to take the bilateral trade between the two countries to $30 billion by 2020.
Mr Parker saw the current impasse as a challenge but not a ‘closed door.’
The TPP imbroglio
“When we signed the Trans-Pacific Partnership (TPP) Agreement two years ago, more than 20,000 people in New Zealand protested. We have to be hopeful and continue to do our work,” he said.
India has continuously expressed its aversion to discuss exemption of tariffs on agricultural, farming and dairy products from New Zealand, as these would adversely affect its own agricultural sectors. Instead, Delhi has offered an FTA in its Services Sector, which has not found much favour with the New Zealand government.
The Indian government has often indicated that it will agree to a Model of Moderate Tariff which is ‘TPPA Minus’ Model.
FTA with ASEAN
Mr Parker was happy to discuss the government’s Free Trade Agreement with the Association of South East Asian Nations (ASEAN), which, including Australia has been named as the ‘ASEAN Australia New Zealand Free Trade Agreement’ (AANZFTA). The government called for public submissions last year as a part of its combined study.
New Zealand’s trade with ASEAN currently stands at $15 billion, up from $10 billion in 2012. The Agreement would cover 600 million people with a combined economic output of more than US$ 2.65 billion.
Mr Parker noted with interest a Memorandum of Understanding signed in presence by INZBC Chairman Robert Barker and Mr Leong.
FTA with Europe
As we wrote this piece, Mr Parker was on his way to France and Germany to hold Free Trade talks with his counterparts in the European Union.
He will also attend a meeting of the Ministerial Council of OECD of which he is the Vice-Chair.
He will also join an informal gathering of World Trade Organisation (WTO) Ministers to discuss ways to advance WTO talks and strengthen multilateralism.
“With protectionism on the rise and escalating fears of trade wars this is a top priority for New Zealand right now. The current tensions in global trade, and threats to the rules-based system, concern our Government deeply,” Mr Parker said.
“If there are gaps in the multilateral rules, the OECD can help us understand how collectively to address them,” he added.
Mr Parker said that many of the challenges that are being addressed by his government– from multinational tax avoidance to climate change and inequality – are best tackled in cooperation with other countries.
Please read our Leader, “Why a trade pact with India gets more distant’ on Page 12.
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Photo Caption:
- David Parker speaking at the INZBC Meeting on May 25, 2018 in Auckland.
- David Parker with Zindia Limited and Indian Newslink Managing Director Jacob Mannothra (left) and Joanna Kempkers
- Kenneth Leong shaking hands with Robert Baker after signing the MoU, watched among others by Mr Parker and Ms Kempkers (directly behind them) and INZBC Treasurer Bhav Dhillon.
(Picture Supplied)
