Key Takeaways
- New Zealand and India have reached a free trade agreement that will eliminate or reduce tariffs on 95% of exports, with significant wins for industries such as kiwifruit, apples, meat, wool, coal, and forestry.
- The agreement will need to pass through the select committee process and be approved by Parliament before it can come into force.
- Labour has not yet confirmed its support for the agreement, while New Zealand First has opposed it, citing concerns over visa numbers and investment commitments.
- The government is confident that the agreement will be implemented, citing the importance of trade for New Zealand’s economy.
- The agreement includes a commitment for 1667 high-skilled temporary visas per year for three years, but does not include provisions for spouses, children, or students.
Introduction to the Free Trade Agreement
The New Zealand government has announced a free trade agreement with India, which is expected to eliminate or reduce tariffs on 95% of exports. The agreement was announced by Prime Minister Christopher Luxon and Trade Minister Todd McClay, who said that it would be a significant boost to New Zealand’s economy. The agreement includes wins for industries such as kiwifruit, apples, meat, wool, coal, and forestry, and is expected to create thousands of new jobs.
Opposition to the Agreement
However, not all parties are supporting the agreement. New Zealand First has opposed the deal, citing concerns over visa numbers and investment commitments. The party’s leader, Winston Peters, has slammed the agreement as a "bad deal", saying that it does not provide enough benefits for New Zealand. Peters has also raised concerns about the number of people who may be allowed to enter the country under the Temporary Entry Employment (TEE) visa, saying that up to 20,000 people may be allowed to enter the country at any one time.
Response to Concerns
Trade Minister Todd McClay has responded to Peters’ concerns, saying that the numbers cited by Peters are "not correct at all". McClay said that the agreement includes a commitment for 1667 high-skilled temporary visas per year for three years, but does not include provisions for spouses, children, or students. McClay also said that the government retains the right to make changes to which skill areas are needed under the visa, and the visa conditions.
Investment Commitments
Peters has also criticized New Zealand’s investment commitments to India under the deal, saying that the country is required to invest $20 billion into the Indian market over the next 15 years. McClay has responded by saying that this is an "aspirational" target, and that the emphasis is on the New Zealand government to make it easier for companies to invest in India. If the government does not meet this target, McClay said that there are "some things that India could do" in response.
Path Forward
The agreement will now need to pass through the select committee process and be approved by Parliament before it can come into force. Labour has not yet confirmed its support for the agreement, but McClay is confident that it will be implemented. McClay said that the agreement is in the best interests of New Zealand, and that trade has become a bi-partisan issue. He pointed to the success of recent trade agreements, including the NZ-EU FTA and the NZ-UAE FTA, which passed with super majorities in Parliament.
Conclusion
In conclusion, the free trade agreement between New Zealand and India is a significant development for New Zealand’s economy. While there are concerns about the agreement, the government is confident that it will be implemented and will provide significant benefits for New Zealand. The agreement will need to pass through the select committee process and be approved by Parliament, but McClay is optimistic that it will be successful. With its potential to create thousands of new jobs and boost New Zealand’s economy, the agreement is an important step forward for the country’s trade relationships.