Ryan Bridge: How are the India FTA talks going?

So we've had a fifth round of talks with India on a free trade agreement. A senior government minister's in town with 42 of his mates.

This is a sign of good progress, but dairy farmers were hoping for a pot of gold at the end of this rainbow and it isn't going to happen. 

McClay and Luxon promised a deal by the election and it sounds like they're on track to achieve that. But is a deal worth the paper it's written on if it doesn't unlock tariff free access for milk powder?

It's our major commodity we sell to the rest for the world. It's one of the reasons Fonterra's the cat that got the cream right now. 

But in their haste and their eagerness, these Ministers are going for quick and dirty over comprehensive and all-encompassing. 

Which begs the question, would a deal look good for the government without dairy in it, or would you look a bit dumb because you've rushed in to buy a car which doesn't actually include an engine?

Here's why it won't include dairy: 

• India is the world's largest consumer of dairy. 
• It meets that demand domestically.
• They don't need or want our stuff.
• They have ambitions to be a major dairy exporter in future. 

The Brits' deal disappointed farmers for excluding dairy. Fed Farmers in Scotland put out a release saying it was a sour deal because of it. You can expect to get the same reaction here if and when a deal is done without our big money spinner included. 

Even our Treasury says dairy isn't going to happen.

I asked Miles Hurrell about this a few months ago. He's realistic. He basically said he doesn't think dairy will get across the line, but if it did, it'd be invaluable. Of course it would be.

Growth in global dairy consumption is expected to largely be driven out of India and Pakistan. 

To miss this boat would be disappointing. They could include some nothing clause about wanting to open in future, but there'd be no guarantee.

Which doesn't make this a deal not worth signing, but the speed at which its being done could actually hurt Luxon's self-described business negotiating skills if expectations aren't properly managed. 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So we've got a fifth round of talks with India
on a free trade deal. We've got a senior government
minister in town. He's brought forty two of his mates over.
This is a good sign of good progress. But dairy farmers,
if you're hoping for a pot of gold at the
end of this rainbow, I don't think it's going to happen. Unfortunately,
McLay and Luxon promised a deal by the election. Sounds

(00:21):
like they're on track to achieve that. But it's a
deal worth the paper it's written on if it doesn't
unlocked tower free access for milk powder. It's our major
commodity we sell to the rest of the world. One
of the reasons Fonterra is the cat that got the
cream right now. We all know this, but in their haste,
their eagerness, these ministers are going for quick and dirty

(00:41):
over comprehensive and all encompassing, which begs the question would
a deal look good for the government without dairy in
it or would you look a bit dumb because you
rushed it. You're rushed in to buy something, you know,
buy a car without actually having an engine in it
and checking first. Here's what I don't think it will
include dairy. India is the world's largest consumer of derry.

(01:04):
Did you know that it meets its own demand domestically,
albeit with much higher emissions. They wouldn't like that At
copp and Brazil. They don't want to be import derry.
It's have made that very clear time and again. They
have ambitions to be a major dairy exporter of their
own in the future. The Brits got a deal disappointed

(01:26):
farmers there because why it excluded dairy? You fed farmers
Scotland put out a press release at the time saying,
you know it was a sour deal. They're upset about it.
You can probably expect the same reaction here when a
deal is done without our big money spin it included.
Even our treasury says dairy probably ain't gonna happen. I

(01:47):
asked Myles Hurl about this a few months ago. He
was realistic, basically said, don't think we'll get it across
the line. If we do, it'll be invaluable. Of course,
it would growth and global dairy consumption expected to be
largely driven out of India and Pakistan. To miss this
boat would be disappointing. They could include some nothing clause

(02:07):
about wanting to open it up in the future, but
there'd be no guarantee of that. And we have learned
this lesson from the Brits who've just been through this process,
which doesn't make this a deal not worth signing, don't
get me wrong, but the speed at which it's being
done could actually hurt Luxon's self described business negotiation skills
if expectations aren't properly managed. For more from Early edition

(02:32):
with Ryan Bridge, listen live to News Talk Set B
from five am weekdays, or follow the podcast on iHeartRadio.