Luxon promises to reopen Free Trade talks with India but stakes have risen

FTA with India is a strategic priority: Christopher Luxon at the India Summit in Auckland on April 18, 2023 (INL Photo by Nikita Patil)

Venkat Raman
Auckland, April 20, 2023

National Party Leader Christopher Luxon drew wide applause at the Party’s ‘India Summit’ held in South Auckland on Tuesday (April 18) when he declared that he would reopen Free Trade talks with India if his Party were elected to lead the next government.

But the mandarins in the Ministry of Foreign Affairs and Trade (MFAT) would caution him on the rising expectations of New Delhi in the wake of the current Labour government dropping the subject from its priority list.

Among these would be Mobility Partnerships, cooperation in the Digital Economy, Business relationship and a better understanding of the aspirations of the student population, which India’s External Affairs Minister Dr Subrahmanyam Jaishankar cited as the elements of the next stage of the relationship between the two countries, speaking at the official inaugural ceremony of the Indian High Commission in Wellington on October 9, 2022.

Strategic Priority

Mr Luxon said that achieving a Free Trade Agreement with India will be a major strategic priority for his government.

“India is one of the most important countries in the world and New Zealand, in my view, is the best country in the world, so it makes sense that our two nations deepen their ties and cooperate more. With a population of more than 1.4 billion people, India’s economy grew by $560 billion last year and by 2030 India is expected to become the third largest economy in the world,” he said, inaugurating the Summit attended by about 90 people, mainly his Party supporters.

The Summit, organised by former National MP Kanwaljit Singh Bakshi, had three sitting National MPs who led their respective panels- Todd McClay on Trade, Mark Mitchell on Law and Order and Erica Stanford on Education and Immigration. There were speakers from businesses and the community providing their perspectives on each of these issues.

Mr Luxon took a swipe at the ‘India-New Zealand 2025’ Policy enunciated by the Labour Party in 2020, saying that the two-way trade has been declining since 2017 (when Labour formed the government) from $2.80 billion to $2.30 billion.

“By comparison, two-way trade with China amounts to $30 billion,” he said.

However, economic factors such as tariffs and market access influence trade volumes, not politics. The value of trade between New Zealand and India has since long been under $3 billion. In 2016, it stood at $2.5 billion according to MFAT figures.

Boosting trade with India: The Panel with National MP Todd McClay, Chartered Accountant Vijay Goel, Businessman Sameer Handa and Heath and Safety Expert Sai Bedekar at the India Summit on April 18, 2023 (INL Photo by Nikita Patil)

“Despite Labour launching a policy in 2020 called ‘India – New Zealand 2025, Investing in the Relationship,’ two-way trade between our two countries has declined since 2017 – from $2.8 billion to $2.3 billion. By comparison, two-way trade with China amounts to $30 billion.

But Mr Luxon rightly pointed out the lacklustre attitude of the current government and that of Foreign Minister Nanaia Mahuta who announced in the presence of India’s External Affairs Minister Dr Subrahmanyam Jaishankar that FTA with India was off the table.

“Australia has just signed a Free Trade Agreement with India and the UK is close to signing one too. Yet Foreign Affairs Minister Nanaia Mahuta has said that a Free Trade Agreement between New Zealand and India is no longer a priority. Well, it might not be for a Labour government, but it will be for a National government that I lead,” Mr Luxon told the Summit.

“India provides a massive opportunity for New Zealand. There are reciprocal opportunities in a number of areas including foreign direct investment, employment opportunities, educational exchanges, and definitely for trade. New Zealand used to work hard and creatively to be seen in the world, but under Labour, it has become more insular and inward-looking,” he said.

Conceding that extraneous factors such as the Ukraine war and the upheaval in banking worldwide are beyond New Zealand’s control, Mr Luxon attacked the Labour government’s management of the economy. The cost-of-living crisis is harming many households and businesses, especially with the rapid rise in interest rates.

“The government is now spending $1 billion more each week compared with 2017 when National was in government. That is an increase of nearly $23,000 per household each year of extra spending. The government is collecting $43 billion more in tax each year; that is $17,000 more tax per household. This is partly because inflation has pushed people into higher tax brackets, yet Labour refuses to adjust tax thresholds for inflation. If it did, more people could keep more of what they earn,” he said.

We will bring back the Three Strike Law and tackle Gangs: National MP Mark Mitchell at the India Summit on April 18, 2023 (INL Photo by Nikita Patil)

Five areas of impact

Mr Luxon used the Summit to address five major areas of the economy if chosen to lead the government after the general election on October 14, 2023. These are (1) Cost of Living (2) Lifting the income of all New Zealanders (3) Better Health and Education (4) A futuristic infrastructure and (5) Restoring Law and Order.

“We will give the Reserve Bank of New Zealand just one focus- controlling inflation. We will stop adding costs to businesses, remove bottlenecks to business growth such as immigration settings, provide tax relief and discipline government spending. The first rung of lifting incomes will be to move people off welfare into work. We will teach the basics brilliantly in primary and intermediate schools with an hour each of mathematics, reading and writing on average, every day, and better training for teachers, too. our government will deliver resilient infrastructure for the future. We will restore law and order. I know that safety is a big concern for many members of the Indian community in New Zealand. As the Leader of the National Party, will go all over the country meeting people where they live and where they work,” he said.

Retail safety under threat

Mr Luxon said that when he entered politics in 2020, he did not anticipate meeting businesspersons who have been victims of brazen crimes.

He provided in graphic detail the ordeal of a dairy owner and his family.

“The couple lived in a one-bedroom flat above their dairy. Their child, aged five, slept on a mattress downstairs behind the shop counter. One night, at 2 am, there was a terrible crash as a car of ram raiders smashed straight through the shop front. Fortunately, the family were physically unharmed but the mother, the father, and the child will live the rest of their lives with the trauma of that night. It was a night in which people with no respect for other people’s property, and no respect for other people’s hard work and efforts to get ahead, turned that mother, father and child into yet more victims of a crime wave. New Zealanders have had enough of it. National has had enough of it, and so have I,” he said.

Mr Luxon said that his government will introduce two major Law and Order initiatives.

“One is called Backing Police, Tackling Gangs because gang offending and gang recruiting are behind a lot of offending. National will give Police extra powers to tackle gangs, and we will ban gang patches in public places. We will create Young Offender Military Academies for repeat, serious young offenders. They can be sentenced there for up to 12 months and the academies will provide discipline, mentoring and intensive rehabilitation – and show serious young offenders that under National, there will be consequences for their actions.

“I care about turning around the lives of young offenders –I have met some of them at community programmes that work hard to make the right interventions. But it is time for a lot more emphasis on upholding the law and standing up for the victims of crime.” Mr Luxon said.

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