Trade Minister Todd McClay is confident the Free Trade Agreement with India will proceed despite NZ First's opposition. Photo / Marty Melville
By Ellen O’Dwyer of RNZ
The Trade Minister says he’s confident the Free Trade Agreement with India will be implemented despite New Zealand First’s opposition, saying he’d be surprised if Labour didn’t support it.
Trade Minister Todd McClay and Prime Minister Christopher Luxon announced the deal at the Beehive on Monday, saying it would eliminate or reduce tariffs on 95% of exports, with wins for kiwifruit, apples, meat, wool, coal, forestry and more.
But NZ First is not supporting it, with the party invoking its “agree to disagree” provision when Cabinet approval for the deal was sought last week.
McClay told RNZ the agreement will be signed next year, and after it’s scrutinised through the select committee process, legislation will need to be passed in Parliament to drop tariff rates for India.
That means whether it passes or not is now in the hands of the Opposition.
He said he briefed Labour leader Chris Hipkins and trade spokesman Damien O’Connor about the deal before it was announced.
“It’s a high-quality agreement, it is very similar to ones that they put through. I’d be surprised if they didn’t support it, but it will be for them to decide where they want to put their vote.”
O’Connor had previously told RNZ the agreement was a “good step forward”, but won’t yet say if the party supports it. He said Labour would make a decision on it in the new year.
McClay said he was aiming to have the agreement come into force before next year’s election, but that it can take a year or 18 months for a trade agreement to go through the full parliamentary process.
He said recent deals, including the NZ-EU FTA and the NZ-UAE FTA, had passed with super majorities in Parliament.
“What is very very clear is that trade has become bipartisan. All New Zealanders recognise trade is important to us ... 400 million people get about 10% of their diet around the world from New Zealand. If we are not out there trading our economy goes backwards, and successive governments of different types have recognised that.
“I have confidence this agreement will go into force for New Zealand, because it is in the best interests of New Zealand, and we are, after all, a trading nation.”
NZ First leader Winston Peters slammed the agreement as a “bad deal”, criticising a lack of wins for dairy – where only limited gains were secured – and saying it was reached for “political purposes”.
Peters also raised concerns about numbers coming into the country under the Temporary Entry Employment (TEE) visa, saying 20,000 people might be here at any one time if spouses and children are allowed in too.
“Now we’re in a very troubled labour market at the moment, we’re trying to turn our economy around, and this will not help,” he told RNZ.
McClay said those numbers were “not correct at all”, and there was nothing in the agreement about partners, spouses and children being allowed for someone on a TEE visa.
He said the commitment was for 1667 high-skilled temporary visas per year, for three years.
“At the end of that period, they have to leave, they can’t stay on, there’s no migration, there’s no rights to citizenship. It is merely a number of visas each year, that New Zealand requires.”
McClay said the Government retained the right to make changes to which skill areas are needed under the visa, and the visa conditions.
When asked whether the detail over spouses and children had been communicated to India, McClay said: “I don’t need to communicate that to them, because it is not captured in the agreement, and there’s no expectation on the Indian side.”
He also batted back concerns Peters raised about numbers of students coming in under the deal, saying there was no commitment for students apart from post-study rights of three years, or four years for PhD students.
“We have a particular focus on the quality of education we can offer, it’s very important for our institutions, and to help others from around the world develop skills.”
Peters also criticised New Zealand’s investment commitments to India under the deal, saying the country is required to invest $20 billion into the Indian market over the next 15 years, and India will “claw back” concessions if this is not met.
McClay said that was an “aspirational” target for investment, and the emphasis was on the New Zealand Government to make it easier for companies to invest in India. If the Government doesn’t do that, there are “some things that India could do”, he said.
When asked whether he was disappointed NZ First had criticised this as a “bad deal”, McClay said he doesn’t think anyone would be surprised that NZ First has a “very strong view” over trade.
“This agreement will be worth billions of dollars of new exports for New Zealand, and thousands of jobs, and it is in the best interests of New Zealand.”
– RNZ