Labour is still mulling whether to back the India free-trade agreement, despite it being set to be signed on Monday.
Speaking to the Herald after Labour’s caucus met on Tuesday, leader Chris Hipkins couldn’t say how close the party was to finalising its position on the agreement, but said it was continuing to talk to the Government “in good faith”.
NZ Herald Wellington business editor Jenee Tibshraeny explains further.
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Speaker 1 (00:00):
Now it's going right down to the wire with the
India Free Trade Agreement. Labor is still mulling whether they
want to back it or not. It's going to be
signed on Monday, though. The Herald's Wellington Business editor Jeane
TIBs Traney's been watching it and is with US Hygiene.
Speaker 2 (00:13):
Hi Heather.
Speaker 1 (00:13):
So are they Are they genuinely tied up in knots
over this or they just trying to drag this out?
Speaker 2 (00:20):
It sounds like they are genuinely tied up in knots.
Chris Hopkins talked to him a couple of hours ago
and he said he was just about to go into
a meeting, another meeting with government or government officials who
try to iron out the issues that labor has. Now
I had thought to myself, how does that work? You know,
how can the government sign an agreement if it can't
(00:43):
be confident that it has the support you know, domestically
because we don't want to sign the agreement with India
and then turn around and say, actually we can't go
ahead with this because we don't have the support. But
that looks like that that could be the issue effectively
the parts of the agreement for them to be enacted,
like the bits around tariffs and quotas that needs to
(01:05):
go through the whole parliamentary process. A law needs to
be passed, but other parts not. But you know, as
it stands at the moment, the government is set to
sign the thing and not have the domestic support.
Speaker 1 (01:20):
So what is your read on it? Is this because
Labor genuinely has concerns that, for example, the significant billions
that we would be required to invest in New India
as actually a hard and fast agreement. Like are they
genuinely worried about that stuff or are they just trying
to get their heads around this so that when they
get attacked by New Zealand first on this trying to
steal their votes, they've got an answer ready to go
(01:41):
and they understand it is it politics or is it reality?
Speaker 2 (01:45):
Ah? I suspect it's reality. And I mean maybe I'm
being generous. But Damian O'Connor, Labour's trade spokesperson, he you know,
was involved in negotiating the steal when Labor was in government.
Labour's concern is that under the deal, New Zealand would
commit to promoting thirty four billion dollars of investment in
(02:09):
India over fifteen years. Now, that is an extraordinary sum
of money. There is no way businesses in New Zealand
are going to put thirty four billion dollars into India
over fifteen years. Like, We're simply not going to be
able to meet that target. Labour's concern is that the
agreement says that, you know, if we don't promote, so
(02:29):
not meet the target, but promote that target, India could
come back after fifteen years and claw back some of
the benefits in New Zealand received. So Labour's saying, well,
there's a real risk actually here for businesses going into
do business with India. You know, if there's a risk
that after fifteen years Indians go, oh, actually you didn't
uphold your end of the stick around this investment thing,
(02:51):
and now we're clawing it back. I think there's some
you know, confusion around wording. That seems to be the
sticking point. But I mean it's hard for us to
seat to know without seeing the agreement. But on the
face of it, thirty four billion dollars of investment, the
promotion of it is unattainable.
Speaker 1 (03:09):
Well, we're never going to spend that amount of money.
So what happens next? When does I mean is Labor
potentially going to allow it to be signed without actually
having given support.
Speaker 2 (03:19):
That could happen. Labor says it's close, but we're going
to have to see the Todd McClay that the Trade
Minister said that actually the government has been briefing Labor
extensively and there's been much more back and forth than usual.
He also seems quite confident that, you know, it will
be fine. I suppose he has to say it will
(03:41):
be fine, you know. I'm not sure what could be
done though at this point to allay Labour's fears. Because
the agreement can't be changed and if they're not happy
with this thirty four billion dollar investment promotion clause, you know,
what can they do about it other than understand it.
(04:02):
They can't change it, so exactly, Yeah, it's an issue.
It's an issue.
Speaker 1 (04:06):
Yes, there seems to be a failure of understanding here.
All right, Jane listen, thank you for that, Looking forward
to finding out what happens, you do know to Traine
the heralds Wellington Business editor are nineteen away from seven.
For more from Heather Duplessy, Allen Drive listen live to
News talks that'd be from four pm weekdays, or follow
the podcast on iHeartRadio
Now it's going right down to the wire with the
India Free Trade Agreement. Labor is still mulling whether they
want to back it or not. It's going to be
signed on Monday, though. The Herald's Wellington Business editor Jeane
TIBs Traney's been watching it and is with US Hygiene.
Speaker 2 (00:13):
Hi Heather.
Speaker 1 (00:13):
So are they Are they genuinely tied up in knots
over this or they just trying to drag this out?
Speaker 2 (00:20):
It sounds like they are genuinely tied up in knots.
Chris Hopkins talked to him a couple of hours ago
and he said he was just about to go into
a meeting, another meeting with government or government officials who
try to iron out the issues that labor has. Now
I had thought to myself, how does that work? You know,
how can the government sign an agreement if it can't
(00:43):
be confident that it has the support you know, domestically
because we don't want to sign the agreement with India
and then turn around and say, actually we can't go
ahead with this because we don't have the support. But
that looks like that that could be the issue effectively
the parts of the agreement for them to be enacted,
like the bits around tariffs and quotas that needs to
(01:05):
go through the whole parliamentary process. A law needs to
be passed, but other parts not. But you know, as
it stands at the moment, the government is set to
sign the thing and not have the domestic support.
Speaker 1 (01:20):
So what is your read on it? Is this because
Labor genuinely has concerns that, for example, the significant billions
that we would be required to invest in New India
as actually a hard and fast agreement. Like are they
genuinely worried about that stuff or are they just trying
to get their heads around this so that when they
get attacked by New Zealand first on this trying to
steal their votes, they've got an answer ready to go
(01:41):
and they understand it is it politics or is it reality?
Speaker 2 (01:45):
Ah? I suspect it's reality. And I mean maybe I'm
being generous. But Damian O'Connor, Labour's trade spokesperson, he you know,
was involved in negotiating the steal when Labor was in government.
Labour's concern is that under the deal, New Zealand would
commit to promoting thirty four billion dollars of investment in
(02:09):
India over fifteen years. Now, that is an extraordinary sum
of money. There is no way businesses in New Zealand
are going to put thirty four billion dollars into India
over fifteen years. Like, We're simply not going to be
able to meet that target. Labour's concern is that the
agreement says that, you know, if we don't promote, so
(02:29):
not meet the target, but promote that target, India could
come back after fifteen years and claw back some of
the benefits in New Zealand received. So Labour's saying, well,
there's a real risk actually here for businesses going into
do business with India. You know, if there's a risk
that after fifteen years Indians go, oh, actually you didn't
uphold your end of the stick around this investment thing,
(02:51):
and now we're clawing it back. I think there's some
you know, confusion around wording. That seems to be the
sticking point. But I mean it's hard for us to
seat to know without seeing the agreement. But on the
face of it, thirty four billion dollars of investment, the
promotion of it is unattainable.
Speaker 1 (03:09):
Well, we're never going to spend that amount of money.
So what happens next? When does I mean is Labor
potentially going to allow it to be signed without actually
having given support.
Speaker 2 (03:19):
That could happen. Labor says it's close, but we're going
to have to see the Todd McClay that the Trade
Minister said that actually the government has been briefing Labor
extensively and there's been much more back and forth than usual.
He also seems quite confident that, you know, it will
be fine. I suppose he has to say it will
(03:41):
be fine, you know. I'm not sure what could be
done though at this point to allay Labour's fears. Because
the agreement can't be changed and if they're not happy
with this thirty four billion dollar investment promotion clause, you know,
what can they do about it other than understand it.
(04:02):
They can't change it, so exactly, Yeah, it's an issue.
It's an issue.
Speaker 1 (04:06):
Yes, there seems to be a failure of understanding here.
All right, Jane listen, thank you for that, Looking forward
to finding out what happens, you do know to Traine
the heralds Wellington Business editor are nineteen away from seven.
For more from Heather Duplessy, Allen Drive listen live to
News talks that'd be from four pm weekdays, or follow
the podcast on iHeartRadio
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