Despite all the rhetoric that comes out of ministries and departments of the Indian and New Zealand Governments, a Free Trade Agreement between the two countries appears to be on troubled waters.
Former Finance Minister Palaniappan Chidambaram had told this newspaper during his visit to Wellington in November 2006 (more than a year before an official feasibility study was launched) that it would be difficult for India to negotiate on agriculture, dairy and food sectors.
His implied message was, “Talk to us about other issues but do not ask us to reduce (leave alone remove) tariffs on New Zealand’s agricultural and dairy products, meat and other related exports.”
He also said, “To India, agriculture is livelihood, to New Zealand, it is trade.”
We have heard our ministers and diplomats say, “To India, Trade is livelihood.”
Trade Minister Tim Groser is an expert on trade negotiations, especially those involving agriculture, proved over the years, especially during his association with the World Trade Organisation. He was a friend of Kamal Nath, who authorised the start of negotiations for an FTA when he was Commerce & Industry Minister.
Unrelenting position
The new Government led by Narendra Modi is business-friendly but it is doubtful if India would relent from its position relating to removal of tariffs on agricultural imports. This has been the main thorn in the flesh of several non-starter FTAs, including those with the US and Australia. These countries anxiously await the successful conclusion of an FTA between New Zealand and India, without either country giving up its stand on the core sectors of agriculture, dairy and meat.
The fact that New Zealand is frustrated over the standoff was evident in the extempore speech made by Prime Minister John Key at the dinner meeting of the India New Zealand Business Council in Auckland last month and the published address of Mr Groser earlier in the day.
“However, if we receive the green light from New Delhi, we will come hard up again on the central problem that New Zealand has not only with India but also with every country we negotiate with: agriculture liberalisation, without which New Zealand cannot enter into any FTA,” Mr Groser said.
Tough environment
He said that he was hoping to meet India’s new Minister of State for Commerce & Industry Nirmala Sitharaman. As alumni of the London School of Economics and as an experienced politician, she would be aware of the implications of lifting trade barriers on agriculture and farming products and as a newcomer, she would rely heavily on the advice of her officials in the Ministry.
India’s High Commissioner Ravi Thapar has also been vociferous in recent weeks about India’s willingness or otherwise in signing an FTA with New Zealand. His statements such as “We want New Zealand as our Technology (not Trading) Partner,” and “New Zealand is not doing justice to itself. Bilateral relationship should go beyond agricultural exports,” would be seen more as unwillingness to pursue FTA than as advice.
We hope that we are wrong and we would be happy if proved so.
