Hands on issues, not lip service, will work

Meaningful alliance will tighten Indo-Kiwi bondHands on issues-Dr Richard Worth Web

Dr Richard Worth – 

Business Councils the world over need to ensure that they do not fall into the quagmire of doing little more than providing fuzzy fellowship opportunity.

The focus must always be on providing sustainable benefits for members with clear business advantages which are measurable.

Delegations led by heads of state often provide slim pickings for the accompanying delegates apart from the dubious pleasure of being a courtier.

The India Trade Alliance (ITA) has taken a different approach to many other business councils in providing an umbrella for those possibilities.

Its mission is

(a) To actively promote a Closer Economic Relations Agreement in goods and services between India and New Zealand with mutual advantages for both countries and members of the Alliance

(b) To enter into Memoranda of Understanding with significant trade entities in both countries to strengthen business networks for members of the Alliance

(c) To facilitate business ventures between businesses in both countries for members of the Alliance

(d) To provide access for business at the highest level to local and state government entities in both countries

(e) To provide a range of support services for members of the Alliance seeking to enter the markets in both countries

Activity parameters

The cynic might observe that mission statements are the work of wordsmiths. Take for example the motto of the Ritz Carlton: “We are Ladies and Gentlemen serving Ladies and Gentlemen.”

They do however provide activity parameters and set activity direction.

In the case of ITA, the implementation strategies are clear; the calibre of membership based on admission by invitation. This process is in progress; sectoral membership broadly set by occupational grouping; a series of rolling major projects in five discrete areas including networks in Mumbai, Delhi and Hyderabad providing matches for increased commercial, sporting and cultural activity between India and New Zealand; and government linkages in both countries.

Diverse marketplace

India is one of the fastest growing economies with a growth rate of over 7% per annum and offers a diverse marketplace across its 29 states.

While the country is a highly complex market, there is good potential for New Zealand products and services due to some key factors as others have clearly identified. They are (1) Widely spoken English (2) Rising personal incomes that create a large group of affluent middle-class consumers (3) Easy access to a skilled and relatively low-cost workforce (4) Organised network of local and global financial institutions, banks and capital markets and (5) A gateway to surrounding markets in the South-East Asian region.

Toothless FTAs

Former Indian High Commissioner (Ravi Thapar) eschewed the ideal of a Free Trade Agreement (FTA) between India and New Zealand.

There are FTA s and FTAs of course; witness for example the fatal absence in the Australia-New Zealand treaty of a dispute resolution provision.

The WTO Doha round started in 2001 and continues today. That impasse has resulted in an increasing number of bilateral and regional trade agreements.

India has not stood apart from that trend. It has existing trade agreements that give limited preferential treatment to Sri Lanka, Nepal, Afghanistan, Chile, Singapore, Malaysia, ASEAN, Japan, the Republic of Korea, and MERCOSUR (Argentina, Brazil, Paraguay & Uruguay).

India is also engaged in various stages of negotiations with Australia, Canada, the European Union, Thailand, Malaysia, Indonesia, and ASEAN (services and investment), Sri Lanka (services and investment), Israel, the Arb Gulf Cooperation Council and the Common Market for Eastern and Southern Africa (COMESA).

Indo-Kiwi relations

New Zealand and India are both members of the Regional Comprehensive Economic Partnership negotiations.

There have been ten rounds of negotiation between New Zealand and India. The last was in February 2015. There are big challenges as the New Zealand Foreign Ministry has recognised which include (a) high tariffs (duties imposed on items at the border that add significantly to the price point in the market) (b) surcharges and duties required at the border (c) sanitary and phytosanitary measures (restrictions on the type of animal or plant material allowed across the border) (d) technical barriers to trade (regulations or officially endorsed standards), import licensing, customs or transparency problems (d) restrictions on individuals (difficulties in recognition of qualifications or obtaining business visas, requirements to obtain local licenses) (e) restrictions on investors (requirements to operate in joint ventures with local partners, requirements to employ locals or restrictions on the ability of New Zealanders to be transferred to work in subsidiaries or affiliates in India, local representation requirements for boards of directors, restrictions on the ability to invest in a new enterprise or invest equity in an Indian company) and (f) financial or business restrictions (restrictions on supplying services from New Zealand including online, difficulties in competing with local firms that benefit from government preferences, complex and discriminatory local regulations).

I doubt that a breakthrough will occur in ongoing government-to-government negotiations despite the undoubted skill of the New Zealand negotiation teams.  Rather it will occur in the context of networks close to the Bharatiya Janata Party.  Those are networks of influence accessible to the ITA.

Dr Richard Worth is a practising lawyer based in Auckland.  He is a company director and a former Minister. He is actively involved in international trade with a focus on Asia and is the past Chairman of business associations with a focus on India, Korea, and Hong Kong. He is a Deputy Chairman of the India Trade Alliance.

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Many find doing business with India amazing

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