New Zealand’s chief trade negotiator Vangelis Vitalis (left), Rotorua Business Chamber chief executive Melanie Short, and Rotorua MP and Trade Minister Todd McClay at a Rotorua Business Chamber breakfast discussing the India free trade agreement. Photo / Annabel Reid
New Zealand’s chief trade negotiator Vangelis Vitalis (left), Rotorua Business Chamber chief executive Melanie Short, and Rotorua MP and Trade Minister Todd McClay at a Rotorua Business Chamber breakfast discussing the India free trade agreement. Photo / Annabel Reid
The proposed New Zealand-India Free Trade Agreement could be “huge” for New Zealand exporters, says Rotorua businessman, Volcanic Hills Winery head of sales and winemaker Brent Park.
But that’s if the agreement gets over the line without being “watered down”.
Local businesses had the opportunity to question New Zealand’schief trade negotiator Vangelis Vitalis and Rotorua MP and Trade Minister Todd McClay about the agreement at a Rotorua Business Chamber event on Friday.
About 80 people from a range of businesses attended.
The proposed New Zealand-India Free Trade Agreement (FTA) aims to lower tariffs and trade barriers between the two countries, making it easier for New Zealand exporters to sell products into India’s rapidly growing market.
He identified barriers of language, cultural differences and currency.
Wine exported to India currently faces a 150% tariff, meaning if a New Zealand exporter sends $100 worth of wine, a $150 tax is added before it can be sold in the market.
High tariffs were one of the main reasons New Zealand wine struggled to compete in India.
Park said the FTA would be an “absolute game-changer” for the wine industry.
However, one concern was if the final agreement did not deliver the access exporters were hoping for, making it a “waste of time” after a lot of work getting “the wheels moving”.
He asked McClay and Vitalis whether it being election year could mean concessions would need to be made.
McClay said election year usually brought “kicking and screaming”, but he didn’t foresee it as an obstacle.
McClay said the deal would not be renegotiated and the Government planned to sign and progress it quickly.
McClay said he had spoken with Opposition leader Chris Hipkins and Labour’s trade spokesperson before the agreement was announced and had made officials available to brief them on the details.
The agreement “takes a lot of reading” and each party in Parliament needed time to fully understand it, he said.
McClay said the India FTA could be as significant for New Zealand’s economy as the free trade agreement with China.
Even without dairy exports, China was New Zealand’s “number one trade partner”.
McClay said it was in the “best interest” of New Zealand.
New Zealand’s chief trade negotiator Vangelis Vitalis (left) with Rotorua MP and Trade Minister Todd McClay answering questions from Rotorua’s business community about the India free trade agreement. Photo / Annabel Reid
Vitalis said mānuka honey was one of the “big opportunities” under the agreement.
Vitalis said the deal would give preferential access to honey, apples and kiwifruit.
“We are the first to secure that. It is really important that we get this agreement through so that we can quickly get the advantage that we have negotiated.
“The good thing about this FTA is that when you take away that tariff, you’ve suddenly got this very large advantage over your competitors.
“So to give you a very practical example, mānuka honey, 66% tariff ...
“We’ve removed that tariff down to 16.5%. All of your competitors will stay at 66%. That is a huge advantage ... and we need to really capitalise on that as quickly as possible.”
Vitalis was “struck” by how much India wanted mānuka honey for its healing properties. He said it was a “big focus” for the country.
“We are hoping that Indian processors and manufacturers will want to use mānuka honey in the pharmaceutical industry there.”
McClay said the Government would help exporters build relationships by organising trade missions and introductions to verified businesses.
He said the honey sector would be at the “forefront of our thinking”, given the access New Zealand had secured before other countries.
General advice
McClay said businesses looking to export to India needed to do their “due diligence” and be open to change.
Rotorua Business Chamber chief executive Melanie Short asked what practical steps a New Zealand company should take if entering the Indian market for the first time in the next year.
Rotorua Business Chamber chief executive Melanie Short (left) asks Prime Minister Christopher Luxon and Rotorua MP Todd McClay questions concerning local business leaders last October. Photo / Michelle Cutelli Photography
McClay said India was growing quickly and would not be a straightforward market, with opportunities likely to come with ups and downs, and challenges along the way.
“Ultimately, the very best thing I think you can do now is start reaching out, start doing your research, start looking at what you think the opportunity is.”
McClay said exporting often came with the perception it would automatically lead to wealth, but “it is hard to do business overseas”.
He said New Zealanders were “very good” at building relationships and trading internationally.
McClay told the room to think about the opportunity “very carefully”, then “back yourself”.
Vitalis encouraged people to stay in touch with officials from the Ministry of Foreign Affairs and Trade.
He said a taskforce was being set up to help businesses benefit from the agreement.
Annabel Reid is a multimedia journalist for the Bay of Plenty Times and Rotorua Daily Post, based in Rotorua. Originally from Hawke’s Bay, she has a Bachelor of Communications from the University of Canterbury.
