Time to rekindle India-NZ trade talks?

A free trade agreement between India and New Zealand has long been a frustrating goal for NZ trade officials, with India wary of perceived impacts on its local market from NZ's agricultural products in particular. As Nigel Stirling reports, the government is again being urged to work harder on a possible deal. 

 A meat industry leader wants to see the Government do more to restart trade talks with India after Australia took a significant step forward in its own negotiations for a free trade deal.

 Australia and India last month swapped offers on reducing tariffs on goods traded between the two countries.

 Australian Trade Minister Dan Tehan said the negotiations were his top priority and he was phoning his Indian counterpart every week to get the deal over the line by the end of this year.

 New Zealand, which kicked off negotiations for its own free trade deal with India in 2010, has not held a negotiating round in six years.

 The talks came to a halt in 2015 after India baulked at NZ’s demands to scrap tariffs of up to 60% on imported milk powder.

 India was part of early negotiations for the massive Regional Comprehensive Economic Partnership trade deal, which includes China, NZ and Australia and 13 other mainly South East Asian countries.

 But it pulled out of those talks before they concluded in late 2020.

 Tehan said Australia accepted India was reluctant to increase dairy imports and had not made those demands in their talks which started a year after NZ began their own negotiations.

 There were not the same sensitivities for India surrounding sheepmeat however, and the Australians were pushing for tariff reductions.

Murray Taggart says an India-NZ FTA should be a priority      photo :Farmers Weekly

Alliance Group chair Murray Taggart would like to see NZ follow fast behind Australia in rekindling its own talks with the Indians.

 The Invercargill-based meat processor has been a trailblazer for the NZ meat industry in India over the last few years through its partnership with meat marketer Quality NZ (QNZ), which it owns with a group of former NZ cricketers.

 Capitalising on the profile in India of former Black Caps skippers Brendon McCullum, Stephen Fleming and Daniel Vettori, QNZ was set up nearly a decade ago to promote NZ lamb to the cricket-mad nation of 1.3 billion people.

 Alliance has been its sole supplier of high-quality lamb cuts and took a 10% stake in the company in 2020.

 Taggart said while sales had been growing before the pandemic, they had only ever reached the low millions of dollars.

 That was because the high average tariff of 36% on sheepmeat had restricted QNZ to selling to five-star hotels and high-end restaurants, which offered more limited opportunity in terms of the sales growth that could be achieved.

 “We are playing in the top end of that market where it is a less price sensitive segment and you can pay the tariff and still get into the market,” Taggart said.

 “As you get into cheaper cuts it obviously is a bigger chunk of the market, but people become more price sensitive and the tariff has a big impact.”

 After taking a hit during the pandemic, QNZ’s sales were gradually recovering as the health emergency receded and the economy opened back up again.

 He said Alliance was as confident as it had ever been about the market’s long-term potential.

 “For sheepmeat we see no reason why India could not be in 20 years like China,” he said.

 However, the Government needed to play its part in getting trade talks moving again.

 While former Prime Minister John Key travelled to India in 2011 and again in 2016 it has not warranted a visit from Jacinda Ardern while she has been in charge.

 Since she has been Prime Minister, Ardern has made travel to the UK and the EU a priority as the Government seeks to wrap up trade deals there.

 “At the moment there is a lot of focus going on to the UK and EU FTAs, and rightly so,” he said.

 “But we would certainly like to see more emphasis also going on India.

 “It has a huge population and is gaining in wealth very quickly.

 ‘It is an opportunity for NZ that can’t be ignored.”

This article originally appeared in Farmers Weekly, and  is published with permission.

- Asia Media Centre