NZ First says it will not support legislation for trade deal with India

The Government has agreed a comprehensive free trade deal which eliminates or reduces tariffs on 95% of New Zealand’s exports to India. But NZ First says that the access is not enough and has told the rest of Cabinet that it will vote against any enabling legislation if and when it comes to Parliament - that puts the deal’s success in the hands of the opposition, likely Labour. “When Cabinet approval for the India deal was sought last week, New Zealand First exercised the agree to disagree provision of its coalition arrangements – while making clear that it would vote against enabling legislation if and when it is introduced to Parliament," NZ First leader Winston Peters said in a statement. Peters said the deal was “neither free nor fair”. “It gives too much away, especially on immigration, and does not get enough in return for New Zealanders, including on dairy,” Peters said. Advertisement Advertise with NZME.Advertisement Advertise with NZME.He said the deal’s dairy access was bad and also criticised the visa access. It is not the first time Peters has deployed this tactic. During the Clark Government, in which Peters also served as foreign minister, Peters opposed Trade Minister Phil Goff’s trade deal with China. He told the Herald earlier this year he stands by that criticism. The rest of the Government says the deal gives the best access of any Indian FTA, with recent Australian and United Kingdom deals including lower access. The deal was finalised earlier this month but had to wait for Indian Prime Minister Narendra Modi to return to the country last week to hold a special Cabinet meeting to agree the deal. Trade Minister Todd McClay said the deal was “historic” and puts NZ exporters on an equal or better footing to competitors across a range of sectors, and opens the door to India’s rapidly expanding middle class. Almost 57% of exports are duty-free from day one of the deal coming into force, increasing to 82% once it is fully implemented. The remaining 13% are “subject to sharp tariff cuts”, the Government says. However, there are questions with how well the deal will land with the dairy sector. India is notoriously protective of its domestic dairy sector and the deal has not managed to significantly increase access to NZ dairy exports. This deal liberalises access in some areas: dairy that is imported in order to be re-exported gets in tariff free under this deal; infant formula will see the current 33% tariff eliminated over seven years. Dairy access to India is not significantly increased. Photo / Mark Mitchell Some of NZ’s higher value dairy exports, worth about US$15,000-$16,000 ($26,000–$28,000) a tonne would see tariffs reduced. However, there is no change to some of the cheaper milk powder exports that NZ excels at, which tends to be priced at US$3000-$4000 ($5200–$6900) a tonne, which faces such high tariffs that it makes NZ milk products uncompetitive in India. The deal includes a provision that means if India concludes a deal that offers better dairy access to a comparable economy, NZ can ask for the dairy access to be renegotiated. The Government has conceded greater visa access to India, something to which NZ First had been resistant. New Zealand will offer three-year visas to occupations on tiers one and two of the green list of skill shortages. The Government will offer 1667 visas a year, which will be non-renewable and not offer a right to remain. The Government will also expand the post-study work rights of some visas. Getting a trade deal with India over the line this Parliamentary term was a key commitment of Prime Minister Christopher Luxon on the campaign trail in 2023. He’d accused the then-Labour Government of neglecting India. The last National Government had begun trade talks with India, but they fell apart. India is among the most protectionist economies in the world and NZ’s is among the most liberal - the two sides had very little on which they could agree. Labour never restarted...