Indian Prime Minister Narendra Modi told an Auckland business event that New Zealand had “committed to invest US$20 billion in India over the next 15 years”.
Prime Minister Christopher Luxon and Trade Minister Todd McClay say the provision does not require the New Zealand government to make that investment.
McClay said it “doesn’t require us to invest in India. It requires us to promote investment”, while Luxon described it as “a commitment to promote”.
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The official National Interest Analysis says New Zealand has undertaken to promote private investment into India, with the aim of increasing it by US$20 billion over 15 years.
If consultations fail and India decides New Zealand has not met the provision, it may temporarily restore some tariffs on New Zealand exports through “rebalancing” measures.
MFAT acknowledges those measures could “undermine the benefits of the FTA to New Zealand”.
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Labour leader Chris Hipkins said the two governments appeared to hold different interpretations of the clause and warned exporters to keep their “eyes wide open”.
He said businesses should consider the possibility that India could restrict market access if New Zealand failed to meet the investment objective.
Official modelling estimates the agreement will lift New Zealand’s annual GDP by about $401 million, or 0.07%, above the no-agreement baseline by 2037.
That is projected to rise to $657.7 million, or 0.1%, by 2050.
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Read more over at Stuff
The Centrist is an online news platform that strives to provide a balance to the public debate - where this article was sourced.
3 comments:
The time has come for New Zealand negotiators to act in our best interests. We have always had a pure, clean, green reputation. They need us as much as we need them. We are constantly selling ourselves short. Also, now we need to take thousands of immigrants as well! Time to take stock New Zealanders.
Don't forget, free trade agreements are written by specialists, predominantly in plain English. Sometimes there is ambiguity, but not in this case. New Zealand's obligation is to "promote" that level of investment, as Luxon says, and not to ensure it, as Modi suggests. However, if India considers that we haven't met the target, they can unilaterally claw back our tariff concessions, and we get no say in the matter. So both politicians are just engaging in a bit of spin. If you really want to know the devil that's in the detail of the FTA, search out the article published by Joshua Riley a few weeks ago, which was reproduced in Breaking Views. What the politicians don't understand, or are deliberately obfuscating, is quite alarming.
I agree, Janine. Yet again our politicians have let us down and sold us short. All done in haste so one or a few could claim a very short term credit that'll almost assuredly come back to bite. As for Hipkins comprehending plain English, he can't when it comes to our other Treaty that very clearly records the ceding of sovereignty.
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