The Labour Party has told Prime Minister Christopher Luxon it wants to see more information about his trade deal with India before fully committing its support.
In a letter to Luxon detailing Labour’s concerns, leader Chris Hipkins chided the PM for not keeping Labour up to date with negotiations despite knowing Labour’s support might be needed to negotiate the deal.
Hipkins wrote that Labour had not yet been formally asked to support the deal despite the fact that with NZ First committed to voting against it, Labour’s support is vital to the deal’s success.
Hipkins said he was concerned that Labour had only been given access to the text of the deal a month after the negotiations were concluded and that the text differed in key areas from what the Government had been saying about the deal.
“Your decision not to involve Labour at any point in the negotiation process - without consultation, despite your public assurances to the contrary - and the expectation that Labour would unconditionally support the agreement once presented with it as a fait accompli, falls short of best practice and is not in the spirit of bipartisanship,” Hipkins wrote.
Hipkins also pointed out discrepancies between what the Government was saying about the deal, and what the deal actually said.
His letter noted that while Trade Minister Todd McClay had told Parliament the deal did not prohibit a cap on student visa numbers being put in place in future, the text of the agreement expressly prohibited the Government from putting a cap on student visas issued to Indian nationals, as revealed in the Herald.
McClay later clarified the deal does not prohibit New Zealand from creating a cap on all student visas issued to people from all countries, including India.
That explanation did not wash with Hipkins who wrote that “any cap on international students would, in practice, breach this provision”.
He wrote to Luxon that the international equation provisions were concerning.
“New Zealand’s recent history demonstrates the risks of migrant exploitation and unregulated labour flows enabled by student labour mobility,” Hipkins said, referring to issues New Zealand had in the 2010s when low-quality education providers exploited student visas to offer what were essentially work visas under the guise of the student education system.
“As Minister of Education, I worked closely with the relevant agencies to support students who were affected by the collapse of a number of international education providers, close down providers who were not delivering quality educational outcomes and restore New Zealand’s reputation internationally as a destination for quality student exchange.
“We note that the current Government has already weakened these safeguards by increasing allowable student work hours and broadening institutional eligibility. Labour is concerned by this regression and does not want to entrench it by constraining future governments,” Hipkins said.
Labour wanted “robust measures to accompany this agreement, including close monitoring to prevent unchecked proliferation of providers and to ensure only high-quality education and qualifications are delivered”.
Hipkins also raised concerns with the deal’s investment clause, details of which remain unclear. The deal requires New Zealand firms to invest US$20 billion ($33b) in India over 15 years.
McClay has said this figure is aspirational and does not bind the Government. However, the deal also stipulates that India has discretion to decide whether the provision is fulfilled, and if it isn’t, what action it can take to clawback market access.
“[A]ny shortfall in this investment could trigger the agreement’s ‘rebalancing’ mechanism, enabling India to unilaterally revoke market access for the apple, honey, and kiwifruit sectors,” Hipkins wrote.
He added that the envisaged investment did not seem credible.
“A far smaller sum was invested in China in the 15 years following the NZ-China FTA, with most of that concentrated in dairy - a sector that is notably not a beneficiary of this agreement.
“In addition, Mr McClay has estimated the agreement will deliver an additional $1 billion per year over 20 years, a smaller sum than the projected investment commitment. This disparity only heightens our concerns about the rationale and credibility of these expectations,” he said.
Hipkins said he wanted key Labour MPs to see unredacted advice from MFAT before agreeing to support the deal.