FTA with New Zealand runs into trouble again
Venkat Raman –
In yet another move that seemed to increase the improbability of a Free Trade Agreement (FTA), a senior Indian government official stated that his country would be happy to sign a regional trade pact rather than a bilateral deal.
Arvind Mehta, Additional Secretary at the Ministry of Commerce and Industry and Lead Negotiator of his government for FTA with India said that multilateral relations were better than than their bilateral counterparts.
Speaking at a meeting of the India Trade Alliance (ITA) on June 15, 2016 at Stamford Plaza Hotel in Auckland, he cited the World Trade Organisation (WTO) as an example and how its failed Uruguay and Doha Rounds of talks led to regional economic blocs and free flow of goods and people among them.
Mr Mehta said that agricultural subsidy was a thorny issue and that it became a bone of contention for the Doha Round of WTO talks.
“There was nothing offered in return for agricultural subsidy,” he said.
He described the recently signed the Trans-Pacific Partnership Agreement’ as a pact outside WTO and hence had only marginal adjustments.
“India can give a generous offer,” he said but stopped short of elaborating it.
The words ‘Free Trade Agreement’ did not appear in any of his public speeches, although he said that India may not be averse to ‘selective trade pact.’
India can immediately offer free trade in service sector, he added.
“In the Goods sector, India would get nothing especially in the context of TPPA to which New Zealand is a signatory. India will gain nothing by signing an Agreement. New Zealand has nothing to offer in the Goods sector,” Mr Mehta said.
“India-New Zealand relations are important but we could perhaps consider a Regional Comprehensive Economic Partnership and then top it with FTA. You need to see the India perspective,” he said.
However, he warned that if New Zealand insisted on a full-scale FTA, it would then be an endless case of negotiations.
Earlier that evening, speaking at a meeting of the India New Zealand Business Council (INZBC) held at Ernst & Young, he said that the Indian government may consider some areas that are not a part of agriculture and farming.
He admitted that there were several challenges and imponderables.
“There are undoubtedly several possibilities. While India is happy to improve bilateral relations, India has to protect its interests. We can perhaps have a mechanism in the services sector,” he said.
India will agree to a Model of Moderate Tariff which is ‘TPPA Minus’ Model, he added.
As we reported for our web edition from the meeting, the tone of his talks over the three days of his stay in New Zealand was such that tariff reduction in the name of FTA would not be in the interest of India.
Mr Mehta has suggested segregating the services sector with ‘goods sector,’ the latter to include agriculture, dairy and related products speaking at the concluding session of the INZBC Summit on June 13, 2016 (see Indian Newslink, June 15, 2016).
Prime Minister John Key has already said that New Zealand would insist on a ‘Complete FTA Package’ and not a selective agreement.
The situation as we see is stalemate and as we have mentioned earlier, an FTA between New Zealand and India is as distant as it was before negotiations began nine years ago. And like everything else, we will be happy to be proved wrong.
- Mr Mehta speaking at the INZBC Summit in the presence of Prime Minister John Key on June 13, 2016 at Langham Hotel, Auckland (Picture by INZBC)
- Mr Mehta with Giri Gupta, Chairman, ITA at the meeting held at Stanford Plaza on June 15