Gilder.
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. Prime Minister Christopher Luxen is heading to India, taking with him one of the largest delegations a New Zealand PM has ever traveled with, and the fanfare makes sense given we currently export seven hundred and eighteen million dollars worth of goods to India annually, but we don't have a formal free trade agreement with the world's largest population and on track to become the world's third largest economy by twenty thirty.
Starting negotiations on that deal has been a priority for Luxen above the other deals he's focused on so far this term. Luxeon even promised in the twenty twenty three election campaign to finalize a deal within his first term of government. But how likely is that? And what would a deal actually mean for you? New Zealand. Later on the Front Page, but At Shaveler, a chair of the India New Zealand Business Council, joins us to delve into
New Zealand's relationship with India. But first, Newstalks z BE political editor Jason Wowles is with us to explain what are all these agreements, memorandums and FTAs, What do they actually mean? Jason? Why is India such a priority for this government.
Oh, it's just a massive, massive market. I mean you just need to look at the sheer size of not just the population, but the size of the economy as well, and it's only projected to get bigger. New Zealand is a small trading nation and the bottom of the world. We live and die by trading. India is extremely lucrative, but it's extremely difficult to get a deal with and the past government, the Labor government, I mean, Chris Luxen gives them a lot of flak, but they did try.
The Key government they did try as well, but it's always been one of the hardest markets to actually get a trade deal. To get one, you need to be on the ground. That's what the Prime Minister has been telling us, and so that's exactly why he's going. He's bringing some ministers and half of New Zealand's business sector, it seems because the delegation is a big one.
So New Zealand has a lot of trade deals with the likes of China, Australia, the UK, the EU, the CPTPP. Why is getting a trade deal such a big deal for politicians.
Well, I think it means they can stamp their mark on it, you know. I mean, the last Labor government gets a lot of flak from the business community, but you can't look past their ability to do a trade deal. Naimahuta as Foreign Minister, really wasn't overseas all that much. She didn't see that much activity outside New Zealand. Yes we have COVID to blame for that, but still even
before that it was a bit tricky. But you got Damian O'Connor who was out there actually on a plane as much as he could be to get these deals across the line, and they did get the upgraded CPTPP deal. Say that three times in a row, idea, and that is an important step for New Zealand given the size of the Chinese market, and it's what this government will continue to do as well. If Chris Luxen is so hell bent on growth as he should be as a
National Party Prime minister. Frankly just a prime minister in general, A good way of getting growth is by facilitating outside capital into the country and by getting a trade deal across the line. By reducing some of those importing and exporting tariffs. That's a good way of getting growth.
We're always hearing about prime ministers signing things when they're abroad, right, But they're not really always trade deals, are they.
No.
I mean, when I was in Vietnam a couple of weeks ago, what they signed was a strategic Comprehensive Agreement, which sounds like it was worked up in the back room of some government department in the bowels of the Beltway, but it's actually quite significant because in countries like Vietnam, I mean, they're a communist country, and you need to work with the government if you're a business, and having these sort of deals means that New Zealand was one
of the preferred partners, and there's only about ten of those in the world. So it's not a quote unquote free trade agreement because they're not working to lower tariffs. But what it is working to do is facilitating a relationship. So trading deals and free trade agreements are important, but you're right, they're not everything.
But our free trade agreement's kind of like the pinnacle. That's like the top agreement that we can get.
There are a number of different kinds of trade agreements. There's just your stock standard vanilla trade agreement, which is country to country. Then you've got something called multilateralism, which is a trade deal between a number of different countries. For example, the CPTPP is a multilateral deal. That one's quite a good one because it involves obviously China. At one point we were talking about the United States being in there. New Zealand doesn't have a free trade agreement
with the United States. It's looking like we probably never will, especially under this administration. So these multilateral deals make it a lot easier for New Zealand to actually work with some of these big players, even though they're not directly having a free trade agreement with them.
This is the fastest we have ever negotiated a deal in New Zealand, and it is one of the highest quality. On entry into force.
Negotiations with the UAE took just four months.
This high quality trade agreement will provide New Zealand with juty free access for ninety eight point five percent of our exports to the UAE, rising to ninety nine percent after three years.
Well think we will gain by partner and our port security objective and we'll open door for Investments, Opportunity and Tourism logistics on agriculta.
Has this government signed many trade deals so far? I know there was one with the UAE earlier this year.
Right, there's a number of things that they've signed. So they have signed, They've signed that one that you mentioned. They'll be looking to get one in India. I don't think that there will. In the New Zealand First National Coalition Agreement, it just says to prioritize getting a free trade agreement with India. It doesn't say to get one, which is smart because India is a hard market to crack.
We have been trying to get on top of that dairy issues from their perspective for decades now and haven't been able to do it. But yes, in terms of the agreements that the governments signed free traded agreements a few also those sort of smaller, different but still important deals like the one with Vietnam.
So you reckon Luckson's pretty unlikely to get MODI to sign on the dotted line.
There will be something that comes out of it. I think I think it'll be some sort of I mean it could be something very limp like we have progressed talks to continue to facilitate conversations about maybe getting a free trade agreement across the line. But you just can't do it in one step. And I think that Chris Luxon has been very careful not to say he's going over there to sign a deal. If he I would
be very surprised if he did. In fact, it would be a major, major, major win for this government if they were to get a free trade agreement with India across the line. This quickly in the piece, But what this is probably is is the first of many steps.
Thanks for joining us, Jason, no problem at all, India New Zealand Business Council chair. But at Shaveler is part of the massive delegation going to India with Christopher Laxin. He joins US now.
First off.
But what are we hoping for when Christopher Laxen goes to India?
Okay, I've I've been very The minimum I'm hoping is that we come down with a very strong relationship building exercise and we initiate the trade discussions which can lead to some kind of agreement or our trade FDA in coming years.
So it's pretty unlikely that he will actually return with as signed FTA.
Hey, oh that really I'll be not hoping for that, but we will be signing a lot of mus for sure.
How important is New Zealand's relationship with India.
I think we need to build this relationship in multiple ways beneficial for US one because India is sitting in a very strong position in terms of geological geopolitical positioning. Second, we are relying on too much on trade on one country, which is China for now. We need a bigger partner
in a bigger number also. And at the same time, if we see for a competitive edge over Australia, we need an agreement with India because India can buy a lot of things that we are not buying yet from New Zealand.
And New Zealand and India have had a huge historical pass together defense connections. For one, our troops fought alongside each other during the Gallipoli Campaign in nineteen fifteen and again in World War Two. Has our relationship strengthened over the decades.
See, relationships are strong. If you see we talk about cricket a lot of time. The first foreign coach for India was John Right if I'm not wrong, See the relationships are there, but we never thought to make the relationship stronger for the trades. We always thought it a good diplomatic relation. And nobody thought in a big way that News and India can have a multi billion dollar
trade relationship. It's not only two and a half billion dollars three billion dollar, so we didn't put too much attention to the detail.
You can see that the countries set up a joint Trade Committee in nineteen eighty three to have discussions about a free trade agreement, and I see that a lot of work was done from about twenty ten to twenty fifteen, ten meetings in total. Why has it taken over forty years to make any kind of progress on this?
I think we always went to India with a transactional relationship. We never build a relationship before we start a transaction. So if you see a lot of agreements with India have done lately or say in last ten years, they have come up over the relationship which has been there for many years now. Even Australia took forteen years to build that relation. So we and again if you see in India andis in relationship is on and off? You said ten to twenty fifteen, we did a lot of
rounds that was pretty good. But from twenty sixteen to twenty twenty four or twenty twey three, nothing happened or not much happened. So when you start and stop, we restart again from zero. And that's a bigger problem.
Is it? Because both countries rely so much on their dairy sector.
I will say that I think we always projected that Using is a dairy destination, but Using is not a dairy only destination. And at the same time, India has been seen that is only agriculture destination. But if you see no, India has done a lot in the last ten years. What dairy is or is one part of all the discussions, but it is not the only part. I will not say that we should consider this as
a as always an agreement. The dairy and we are a dairy destination to be honest, And either did you want to call it a dairy destination?
Two?
Do you think current tensions with China and the issues facing the Indo Pacific are placing pressure on site owning a free trade deal with India for New Zealand.
I think a lot of people are seeing that way. But if you even that relationship isn't that that issue is not there? Still New Zealand need and a big, strong economic partner in the Indo Pacific region apart from China or Australia, and India is that big economy which is untapped. So if you know the numbers, we are forty billion dollar trade worth with China. We are only two point seven billion tread worth with India. Now even we do double, low, triple, we will still get a benefit.
This mission is about stepping it up a gear, and that's because India really matters to New Zealand. With one point four to five billion people, it is the most populous nation on Earth and its economy is on track to being the third largest in the coming years. But despite India's growth and scale, it remains just our twelfth largest two way trading partner, accounting for one point five
percent of our exports. And we need to step it up because with four hundred and forty five million people in India's middle classes, I think the economic growth opportunities obviously speak for themselves, but there is so much more to our relationship also than just our economic ties.
We know that Luxen is going to meet with the Indian prime Minister Naranda Mody, a man who's known for some bold and controversial decisions, most recently. I'm thinking the contentious agriculture reforms in twenty twenty, which was forced to drop a year later after those mass protests from farmers. How do you think Luxon, as a man and a politician, is going to go at negotiating with a man like Mody.
I think there are a lot of positives. See you currently Mody or Indian government. What they're looking is at how you can grow India and how you can add value to India. And if I understand the experience which Prime Minister Luxen have currently working in a corporate sector with in the term lever also which is a part
of Unilever. If you know, if you recall he knows bits and pieces, or say, I think a lot of things for India which can be useful and if you talk India needs help to grow India and if you talk that we will be in the right position to do a lot.
Of things right. So this might be an area where Luckson's corporate speak might help it great.
Agreed, So the corporate speak, the understanding of India, the like if you can get things done that will be helpful with India. New Zealand will get a lot of benefit in terms of the relations which we have and the amount of activity we have done in last twenty four months or say twelve months. Lately there are eleven to twelve meetings with ministers that is actually adding value.
What do you think the best outcome will come from Luckson's trip to India.
See one thing which is very clear. We are taking the biggest delegation. We are actually getting the I involved. Also, the benefit is that you are showing that we are open for business. You're showing that we are here to make our relationship were not are transational and the repeating that message and joining major events in India like Rice and a dialog is something which can show that Yep, New Zealand is on a very good position to trade with India in a bigger numbers.
Thanks for joining us brat.
Great, Thank you very much.
That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at NZ Herald dot co dot MZ. The Front Page is produced by Ethan Sills and Richard Martin, who is also our sound engineer. I'm Chelsea Daniels. Subscribe to the front page on iHeartRadio or wherever you get your podcasts, and tune in on Monday for another look behind the headlines.