Trade Minister Todd McClay is leading the delegation of MPs and business representatives for the historic occasion. Photo / Mark Mitchell
By Russell Palmer of RNZ
Trade Minister Todd McClay will formally sign the free-trade agreement with India in New Delhi about 9pm on Monday (NZT).
He has taken a delegation, including MPs from several parties, and more than 30 business representatives, and will also host a joint business summit with Indian Minister for Commerce and Industry Piyush Goyal.
“I’m just checking to make sure there is ink in my pen,” McClay said last week. “It’s such a significant achievement for New Zealand.
“If you think about it as 1.4 billion people in India, their wealth is growing. They are going to become the consumers of the future.
“The New Zealand economy is getting on at the ground floor of that and, I think, in the future, this will be one of the most significant trade agreements to help secure our economy – but a lot of people have worked very hard to make sure we can get there.”
McClay visited India seven times as part of efforts to negotiate the deal, since the coalition took office, after Prime Minister Christopher Luxon made securing such a deal an election promise during a televised debate in 2023.
Last week, Labour confirmed it would back the deal, paving the way for legislation enabling it to pass through Parliament.
The party’s support was needed by National, after New Zealand First announced, minutes before the deal itself, the coalition party would oppose the deal.
NZ First leader Winston Peters has opposed migration aspects included in the deal, as well as a lack of wins for dairy and concerns about a clause requiring the Government to promote US$20 billion ($33.94b) of private investment in India within 15 years.
Labour’s agreement to back it came with a handful of policy concessions, and a warning the investment clause was “very unrealistic” and “almost impossible” to achieve.
Labour leader Chris Hipkins warned that could lead the Indian Government to claw back the market access McClay and other officials had worked so hard to achieve.
McClay pushed back on the likelihood of that happening, saying if India decided New Zealand had not met the condition after 15 years, “they can put in place measures that are temporary and proportionate – and so it is not as significant as maybe it sounded”.
“There’s a special committee that the two parties have agreed to set up 12 months after the agreement enters into force. That is to monitor implementation of the agreement to make sure it’s working and, secondly, to continue to look for ways to improve the agreement.
“We’ll also be talking to them about the promotion that we are doing on an ongoing basis around investment, so I don’t expect there will be a challenge or a problem.”
He said the commitment was not for the Government to invest that figure merely to promote investment.
Finance Minister Nicola Willis had previously expressed frustration about how long it took Labour to agree to back the deal, saying just the day before that Labour was “courting the same” anti-immigration votes as New Zealand First.
“We’ve been giving you advice for four months, we’ve had more than 20 meetings, we’ve responded to all of your requests. You’re trying to draw this out and, as I say, you’re playing into exactly the same concerns that New Zealand First is trying to whip up.
“You’re making a very political choice and I think it’s unfortunate, because what I think we should be doing on a matter like this is putting the interests of our people and our economy first.”
However, McClay was far less critical.
“No, I haven’t been frustrated by it,” he said. “I mean, it’s important to go through it, but we’ve had to do the legal scrubbing and, once that was finished, we reached agreement on a date to sign.
“It happens to have coincided with when Labour have said they’ll give their support.”
He said Labour’s claim that legal advice to the Government about the deal had not been provided until last week was not entirely accurate, but refused to say how.
“You’ve got to consider their trade spokesman was in China last week. We had to wait until he was back, until he could have the meeting.”
McClay said the agreement provided huge opportunities for New Zealand exporters.
“I’m really not jumping into that,” he said. “They’ve made the right decision and I’m grateful to them.”
- RNZ