’Big, tough issues’ yet to come in trade talks
Stuff.co.nz, New Zealand
’Big, tough issues’ yet to come in trade talks
By John Hartevelt
27 June 2011
New Zealand might settle for a free trade agreement (FTA) with India that is "slightly different" to the "completely comprehensive" deal with China.
Prime Minister John Key was due to arrive in New Delhi overnight on a state visit that will include a bilateral meeting with Indian Prime Minister Manmohan Singh tomorrow.
The two countries have agreed to try to treble two-way trade to $3 billion a year by 2014.
Negotiations for an FTA with India started last year and four rounds of talks have been completed.
However, officials say the "big, tough issues" are still to come and they are expecting "long, difficult and tiring" talks ahead.
"The challenges are not to be under-estimated," Key said.
"They’ve obviously got a big dairy sector and even though their demand is phenomenal, you always get tense negotiations whenever there is a country that has a significant agricultural base."
Trade Minister Tim Groser was also due to feature in this week’s visit along with senior business figures from 28 Kiwi companies looking to expand in India, including Fisher & Paykel Appliances, Zespri, Mainfreight and Fonterra.
Groser hosted the Indian commerce minister in New Zealand last month.
In a joint statement after the visit, the two agreed that the FTA should be concluded within eight to 10 months.
Officials are determined that agriculture will be "well and truly" covered off in an FTA with India, but longer phase-out periods on import controls may be an option.
"While I think it might be a different FTA to the one we have with China, there is every chance that we will actually get a deal concluded," Key said.
Asked how it would differ from the FTA with China, he said: "China is completely comprehensive. It will be a high-quality agreement [with India] because we won’t sign it unless it is, but it’s likely to be slightly different."
Indian demand for food products in particular was "incredible", he said.
It faced major challenges on food security and could use Kiwi goods as well as technological know-how to improve the efficiency of its domestic industry.
"In terms of the overall Asia-Pacific region, India is clearly going to be one of the powerhouse economies," along with China and Indonesia.
Australia has also started free trade talks with India in what has become a global clamour for access to the large and growing Indian markets.
New Zealand is considered to be on "a crowded stage", vying with several other countries.
