Editorial: Now the Hard Work Begins
OPINION: After much wrangling, the Free Trade Agreement (FTA) between New Zealand and India is a step closer to fruition.
The only exception is a disappointed dairy sector, which hardly features in the deal, but was never likely to.
The big winners in the FTA are meat and wool, horticulture, and forestry.
The 33% tariff on sheepmeat will go as soon as the deal comes into force. This has been a particular bug bear for sheep farmers who have lost out badly to the FTA between Australia and India. Before Australia got its FTA, India bought 89% of its lamb and mutton from NZ, but now it's down to a mere 8%. This will change under the new arrangement.
The tariff on wool exports will also go.
The other big win for NZ is in horticulture. India is the fourth largest market for our apples, but they currently attract a 50% tariff. From day one, this will be reduced to just 25% for 32,500 tonnes growing to 45,000 tonnes over six years.
Kiwifruit will also benefit with the 33% tariff cut to zero for 6250 tonnes from day one and growing to 15,000 tonnes over six years. For volumes outside the quota, the tariff rate will be 16.5% from day one.
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Manuka honey will get a 75% tariff rate reduction over five years and the 33% tariff on cherries and avocados will be phased out over 10 years. The wine industry is another beneficiary with the 150% tariff cut back to between 66-83%.
The 5.5-11% tariff on forestry products will be immediately eliminated.
The announcements of the FTA came just before Christmas at a hastily-called press conference at Parliament, fronted by Prime Minister Christopher Luxon and Trade and Agriculture Minister Todd McClay.
Luxon described the deal as a landmark moment and an exciting opportunity for NZ exporters, saying the gains are wide ranging and significant.
He says India is the world's most populous country and is the fastest-growing big economy - and that creates opportunities for jobs for Kiwis, exports and growth.
"The result is a high-quality trade agreement with a trusted partner that will deliver deep and lasting benefits for NZ. I have just spoken to Prime Minister Modi who shares our excitement to further cement the strong relationship between New Zealand and India," he says.
Trade Minister Todd McClay says the FTA is a once-in-a-generation agreement that creates opportunities for our exporters that they have never had in India.
He says it will deliver thousands of jobs and billions in additional exports and give unprecedented access to 1.4 billion Indian consumers.
"Trade grows the economy and creates jobs - the NZ India Free Trade Agreement is about future-proofing opportunities for our exporters and allowing Kiwi companies to continue to punch above their weight on the world stage," he says.
