Source: New Zealand Government
New Zealand and India have today signed a once-in-a-generation Free Trade Agreement (FTA) which will lead to more jobs and higher incomes for Kiwis, Prime Minister Christopher Luxon and Trade and Investment Minister Todd McClay say.
Indian Minister for Commerce and Industry Piyush Goyal and Mr McClay signed the Agreement in New Delhi today in front of a large crowd of New Zealand and Indian businesspeople.
“The benefits of this FTA are widespread, and our business community is excited to see the doors of opportunity open to 1.4 billion people whose economy is set to become the third largest in the world,” Mr Luxon says.
“One in four jobs are tied to trade. In signing this FTA we are setting businesses up to succeed, boosting Kiwi jobs and enabling economic growth – and that means more money in Kiwis’ pockets.”
Mr McClay says the FTA supports New Zealand’s ambitious goal of doubling the value of exports in 10 years.
“This deal will deliver thousands of jobs and billions of dollars in additional exports,” he says.
“Creating opportunities for our businesses to diversify and create strong trading relationships provides economic security for New Zealanders – and that is crucial in these times of global unrest.”
Today’s signing ensures New Zealand is on track to benefit from a Most Favoured Nation clause for wine and services exports, whereby the better access the European Union has secured for its wine and services will be extended to our exporters if our agreement comes into force first.
“That clause will be worth tens of millions of dollars in extra exports for the New Zealand economy,” Mr Luxon says.
“Two-way trade is currently NZ$3.95 billion. The deal we have struck and the relationship we have built will grow this exponentially and deliver deep and lasting benefits for generations to come.”
Notes to editor:
The historic agreement was concluded in December and eliminates or reduces tariffs on 95 per cent of New Zealand’s exports – among the highest of any Indian FTA. Almost 57 per cent of our exports will be duty-free from day one including lamb, wool, coal, leather, most forestry and industrial products. This will increase to 82 per cent when fully implemented including infant formula, a kiwifruit quota almost four times our current exports and seafood. The remaining 13 per cent including kiwifruit, apples, mānuka honey, wine and some dairy is subject to sharp tariff cuts.
Signing activates the standard parliamentary process, allowing Parliament and the public to scrutinise the agreement through the Select Committee. The FTA text and National lnterest Analysis will be tabled in Parliament tomorrow and referred to the Foreign Affairs, Defence and Trade Committee (FADTC).
Once FADTC has completed its examination, enabling legislation will be introduced and will follow the usual legislative process. This approach is consistent with that taken for the TPP, CPTPP, and agreements with the United Kingdom, European Union, and United Arab Emirates.
Key outcomes for New Zealand include:
- Tariff elimination or reduction on 95 per cent of our exports.
- Duty-free access on almost 57 per cent of New Zealand’s exports from day one, increasing to 82 per cent when fully implemented, with the remaining 13 per cent being subject to sharp tariff cuts.
- Immediate tariff elimination on sheep meat, wool, coal and over 95 per cent of forestry and wood exports.
- Duty-free access on most seafood exports, including mussels and salmon, over seven years.
- Duty-free access on most iron, steel and scrap aluminium, over 10 years or less.
- Duty-free access for most industrial products, over five to 10 years.
- 50 per cent tariff cut for large quota of apples – nearly double recent average exports.
- Duty-free access for kiwifruit within a quota almost four times our recent average exports, and tariff halved for exports outside of quota.
- Duty-free access for cherries, avocados, persimmons and blueberries, over 10 years.
- Tariffs on wine reduced from 150 per cent to either 25 or 50 per cent (depending on the value of the wine) over 10 years plus a Most Favoured Nation (MFN) commitment.
- Tariffs on mānuka honey cut from 66 per cent to 16.5 per cent over five years.
- MFN status and liberalisation across services exports.
- Duty-free access for dairy and other food ingredients for re-export from day one.
- Duty-free access for bulk infant formula and other high-value dairy preparations over seven years.
- 50 per cent tariff cut for high value milk albumins within a NZ-specific quota equal to current export volumes.