Kia Ora India Editor Dev Nadkarni spoke with Hon Damien O’Connor, New Zealand Minister of State for Trade and Export Growth on his Government’s response to India not joining RCEP. New Zealand had been hoping to upgrade its trade relationship with India through this multilateral agreement instead of the long-elusive Free Trade Agreement between the two countries. Minister O’Connor strongly opines that RCEP would be a very important agreement for India for boosting trade particularly in the 15 nations that are expected to sign the deal in February next year. Mr O’Connor, who is also Minister of Agriculture and Biosecurity, Food Safety, and Rural Communities, discusses his recent trip to India and New Zealand’s options for boosting trade with India, which many agree is at a level far below its potential
What have been the highlights of your recent trip to India?
It was a privilege to meet Indian ministers and also visit the markets. It was also an absolute privilege to be hosted by Amul at one of its collection points.
Has India’s pulling out of RCEP been disappointing for NZ?
It has been disappointing for NZ because we as a country have been out on a limb working to ensure that India would be part of the RCEP and we still believe that it is possible. We understand there are domestic issues and sensitivities for India and we’ll work towards including them in the final RCEP agreement in some way.
What are the government’s plans now?
The door is still open for dialogue. Two colleagues are going to India early next year and we will continue to advocate for India’s inclusion whenever they are ready. One of the points I made is that while the economy has been largely internally focused and as India looks to export its products, particularly in agriculture, trade agreements and fair rules of trade will be absolutely essential to ensure that there is fair access to markets particularly in Asia and elsewhere in the world. Without trade agreements it is likely that access would be blocked in many markets.
In the meantime will New Zealand consider an upgraded bilateral agreement?
We’ve had a very healthy bilateral relationship. We have always supported a regional agreement like RCEP because it offers more security and safety across 16 countries. We’ll continue to talk on a bilateral basis; we have products going in and out of both countries; we’ve got sanitary and phytosanitary agreements and a number of very robust agreements for that trade but we still support through RCEP.
So for the Government it is a priority to get India on board RCEP?
There has been a huge amount of investment and hard work where it has got 16 countries to agree to the text. Not every part of the agreement is finalised but there’s huge progress at a time in the world where we have growing protectionism and uncertainty around trade for all countries including India, New Zealand, Australia and Japan – and we’ll see the value in cementing in the framework for progress.
You also met with Kiwi companies doing business in India. Some of these companies are leveraging India’s emerging status as a manufacturing hub for the global market. Does NZ have a strategy to scale this up?
We are more than happy to support investment into India for manufacturing capability and export but we don’t want to be at risk on our investments when exports from India is blocked because of inadequate trade arrangements...
Such as RCEP?
Correct. RCEP will allow the investments that we make to open opportunities in 15 other countries.
Have exports from India been blocked in some of these countries?
The ministers were referring to some agriculture exports that have been blocked from other countries in an unfair way but this is the reality of trade without rules.
What about new opportunities for NZ in the agriculture sector in India?
We will continue to build those relationships... we have some investments in dairy farming operations there; we have Fonterra in a partnership there; we have Zespri working on distribution agents; we’ll continue to build on those relationships but the uncertainty means that they’ll go very slowly until we’ll have security through robust trade rules.
India plans to double its economy from $2.7 trillion today to more than $5 trillion by 2025. How does New Zealand plan to take advantage of this?
An economy of that size, no matter what NZ does, it will be miniscule. Even our dairy produce if we put into that market would be miniscule. But we are mindful of the services, technology and knowledge sectors and assisting in the development of the Indian economy.
So is it fair to say that a lot of this will depend on RCEP?
Without RCEP, India will be isolated from the opportunities in 15 other significant countries in Asia.
And finally any pointers on NZ-India direct commercial flights?
Technology for long flights exists but the possibility of direct flights will be real but it must be supported by not just people movement but by trade movements as well.