Santa's present for the primary sector - an FTA with India
Primary sector leaders have welcomed the announcement of a Free Trade Agreement between India and New Zealand.
This is momentous occasion and achievement and something that has taken dogged determination of the highest order by McClay and the officials negotiating team led by MFAT’s amazing Vangelis Vitalis – arguably one of the greatest NZ trade negotiators of all time. The FTA is a fabulous Christmas present for the rural community. Great deals for sheepmeat, wool, apples, kiwifruit, and other horticulture products plus forestry.
But no FTA has ever been absolutely perfect and welcomed by everyone in my fifty plus years in journalism. Trade and politics are inextricably linked and it’s the latter that has seen the dairy industry almost squeezed out of this deal. This is because the dairy industry in India comprises 80 million dairy farmers – mostly with very small holdings but with immense political power. Just remember also that India has 300 million cows and produces about a quarter of worlds milk. NZ has a mere five million cows.
Against this backdrop it has been clear for yonks that India would block dairy inputs, and no country has ever had an FTA with India that allows this. So why is Winston Peters threatening to block the deal when it comes up for ratification in the NZ parliament later this year? He says, “Regrettably, this is a bad deal for New Zealand. It gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy”. Is it immigration that is the problem word?
Interestingly the wool industry which one of Peters on MP’s is a champion of, is a beneficiary of the FTA with the tariffs on wool being removed from day one.
A shout out should go to DCANZ who represents the dairy exporting companies who have fairly stated that they are disappointed at dairy being pretty much excluded from the FTA. But praising team McClay for their work and politely urging them address the trade challenges that dairy faces. Even former Trade Minister Damien O’Connor has admitting getting dairy into this FTA was near impossible.
The NZ/India FTA while not perfect is still excellent and far better than what we have now. So, let’s hope that in the end there is bipartisan support for it and that churlish and childish politics don’t torpedo it for the sake of a few miserable votes at the next election.
Peter Burke is Editor at Large for Rural News
