Labour is promising to support the Government’s free trade deal with India but is warning exporters could have their market access revoked if New Zealand can’t fulfil a $33 billion investment commitment.
Leader Chris Hipkins revealed his party’s position at Parliament today, having spent weeks meeting with officials to better understand the deal which requires Labour’s support to pass it through the House given New Zealand First opposed it.
NZ First leader Winston Peters was quick to react to Labour’s announcement, amplifying concerns about the FTA’s impact on migration and the investment clause while describing the deal as a “disgraceful sellout of the country’s future”.
While Labour hasn’t been exercised about migration, it had repeatedly raised concern about the deal’s requirement for the Government to “promote” New Zealand private sector investment in India, with the aim of this climbing by US$20 billion (NZ$33b) over 15 years.
Should that target not be met, it was feared India could revoke New Zealand exporters’ access to its market.
The full text of the agreement will be made public the day after it is signed in New Delhi on April 27.
Hipkins, flanked by foreign affairs spokesperson Vanushi Walters and trade spokesperson Damien O’Connor, said he had written this morning to Prime Minister Christopher Luxon to affirm Labour’s support for the deal.
He said the Government had made several commitments in return, including funding to expand teams monitoring migrant worker exploitation, speeding up visa processing and prioritising the Modern Slavery Bill ahead of the election.
However, Hipkins said his concerns about the “very unrealistic” investment target hadn’t been allayed.
“That is not something that the Labour Party would have signed New Zealand up for.
“All of our exporters who seek to take advantage of the opportunities this trade agreement provides need to do their own due diligence.”
Asked why Labour would support the FTA if those concerns remained, Hipkins said it wasn’t worth scrapping the deal over but reiterated how exporters needed to be aware of the potential ramifications.
O’Connor, who had engaged multiple times with Trade Minister Todd McClay amid Labour’s deliberations, said the India FTA was unique in that previous deals would reduce risk to exporters over time.
“This one has the potential to do the opposite, but it is a judgment made on the level of promotion of the investment of the $20 billion US.
“So that’s, that’s a judgment that I guess the Indians will make, we have to ensure that we’ve built up positive commercial partnerships with the Indians and that they see the value in continuing with these concessions because the alternative could be very, very detrimental to exporters.”
Peters and NZ First deputy leader Shane Jones have been among the main opponents to the deal, the latter warning of a “butter chicken tsunami” which Hipkins condemned as racist.
The party has claimed the deal enabled excessive immigration, something McClay has dismissed.
Peters, who reacted to Hipkins’ announcement on social media, questioned how Labour could support the deal amid concerns about the investment clause.
“Labour themselves have said this FTA is ‘high risk’ because if we don’t meet that threshold to India’s satisfaction India will CLAW BACK whatever gains New Zealand thinks it has achieved.
“We will continue to oppose this deal and fight against this disaster of an agreement.”
Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.