Venkat Raman –
The fact that New Zealand does not expect a Free Trade Agreement (FTA) with India would be delivered on a platter was emphasised by Trade Minister Tim Groser last week, when he said that there were ‘better commercial opportunities in India than just a trade deal.’
He however stopped short of saying that his government had abandoned the idea.
In fact, answering a straight question from this reporter, “On the face of troubles on the one hand and the successful signing of the Trans-Pacific Partnership Agreement’ on the other, has your government dumped FTA with India?” his reaction was instant.
“No, not at all,” he said.
Mr Groser was speaking at a meeting of the India New Zealand Business Council (INZBC) as a part of its successful ‘Business Beyond Borders’ series at the headquarters of Westpac in Britomart on Friday, October 9, 2015.
“This business of FTA has not been properly understood. We really do not need a FTA to do business with India. Establishing a direct air link; creating new commercial, industrial and investment opportunities are not related to a trade pact. There are many avenues available for profitable engagement with India,” he said.
Those who had known Mr Groser as the Trade spokesman of National Party while in opposition and as the Trade Minister during the first three years of its governance (from November 2008) may believe that the ace trade negotiator has given up his penchant for FTA with the world’s largest democracy and the fastest growing economy. For, much has changed in the past few years in India. There is little evidence that New Delhi is in a hurry to sign a deal with New Zealand.
On the contrary, patience is the key to engagement with the mighty economic power.
Mr Groser admitted, although not apparently, that India had its own problems to tackle but played a different tune on trade terms.
He had figures wrong when he said that India has a huge challenge of tackling poverty and that there are about 600 million poor people in India. According to a recent World Bank Report, about 21.5% of India’s 1.23 billion people (about 273 million) were below the poverty line in 2011; that figure has improved in the past three years.
“We have limited options. We need to access India’s middle class. Our trade with India should not be based on dairy, sheep or apples. We can offer our technology and do business with that country,” he said.
Those were in fact the words of former Indian High Commissioner Ravi Thapar. He angered his hosts when he said that New Zealand should consider being a ‘Technology Partner’ rather than a ‘Trade Partner.’
Mr Groser spoke extensively about TPPA which he signed with 11 other global counterparts in Atlanta, USA on October 4, 2015. We have detailed analyses of this Agreement in our Businesslink and Viewlink pages of this issue.
Stating that trade policy gets translated into foreign policy through economic policy, he said, “TPPA is largely important and relevant to the modern world. India should contemplate implementation of the Agreement to enjoy the accruing benefits,” he said.
Earlier, Indian High Commission Charge de Affaires Sandeep Sood said that there were positive signs of growth in the economy.
Stating that the future of India rested on its young population and the increasing power of the middle class, he said, “We are optimistic. India has seen strong industrial growth. There is significant progress in infrastructure. Our trade has been robust and our foreign exchange reserves have now reached about $US342 billion,” he said.
Praising the positive contributions of INZBC to strengthening ties between the two countries, he said, “This is a credible organisation and we will extend all support.”
Welcoming the gathering, INZBC Treasurer Bhav Dhillon outlined the significant achievements of his organisation and said that such meetings on monthly basis were more effective and useful than just a single large gathering annually.
Tim Groser and Sandeep Sood speaking at the INZBC Meeting on October 9.