The red meat sector wants to have a “proper adult conversation” about how New Zealand can develop its trade relationship with India.
Discussion about whether a NZ-India free trade agreement (FTA) is viable and how NZ should develop the relationship came up multiple times at the Red Meat Sector Conference in Auckland this week.
In the past year, NZ has signed FTAs with the United Kingdom and European Union. The UK deal was applauded by the red meat sector, but the EU deal was labelled “poor quality”.
India has also recently signed two FTAs, with the UK and Australia. In Australia’s case, dairy was excluded from the preliminary trade deal.
The previous National government started talks with India but they did not go anywhere due to the significance of the dairy sector in both countries.
India is among NZ’s top 15 trading partners, with two-way trade in goods and services worth nearly $2.2 billion.
Trade with India came up during the political debate at the conference on Sunday evening.
Trade Minister Damien O’Connor somewhat downplayed what could be done with India. National’s Todd McClay said a high-quality FTA with the country would be a priority if his party got into power after October’s election.
O’Connor said while India was a focus, the government has to be realistic and not “promise you something we can’t get”.
He noted he’d be heading to India in the coming weeks to develop relationships. His office didn’t respond to a request for comment about that trip.
Meat Industry Association chief executive Sirma Karapeeva said in an interview that trade with India should be a priority and a “proper adult conversation” is needed – “we can’t ignore it as a fast-growing economy with a huge middle class which is increasing in wealth”.
Karapeeva travelled to India last year and was surprised at how focused the country was on growing its economy and putting itself on the global map as a “powerhouse”.
“So, we can’t ignore India.”
India is a “very particular” country and NZ needs to think creatively about how to approach the relationship.
“I think it really falls on our shoulders to start investing and building up that relationship now, so that some time in the future we can actually get round the table and discuss trade issues.”
Karapeeva said she understands O’Connor’s comments that he can’t promise an FTA.
“I don’t think anyone’s asking him to promise an FTA from today to tomorrow. What the sector is really interested in is a long-term strategy on how we tackle this market.”
Because of religious beliefs in India, NZ’s beef is clearly off the table, but Karapeeva said sheep meat is where the opportunity is.
Currently, it faces a tariff of between 30% and 33%.
Karapeeva said the MIA had one company that exported with that tariff applied and had been very successful in targeting high-end restaurants and hotels.
During the debate at the conference, O’Connor misquoted Karapeeva saying she’d backed up a comment by another sector leader who said NZ should progress without dairy.
She said talking about whether to negotiate with or without dairy was putting the “cart before the horse”.
“My position is that we should have a proper adult conversation about how we tackle this market and what the strategy is.
“I think the strategy is building up those relationships, building up the trust in the Indian system. Once there is that trust, the pathway to talk about trade issues will be very different to the ones we’re facing at the moment.”
Ministry of Foreign Affairs and Trade deputy secretary and chief negotiator Vangelis Vitalis said both India and the United States should be at the top of the list for NZ.
Currently, nearly 75% of NZ’s exports are covered by “legally binding enforceable agreements”, but to get to 90% NZ needs two big agreements.
“One is clearly the United States and the other is, of course, India.”
Those two are big challenges considering neither is particularly enthusiastic about a negotiation with a country such as NZ.
“An open market, offering very little immediate benefits, but bringing a whole lot of sensitive issue to the table for them …
“We are going to have to … find a way to work with India.”