Christopher Luxon says Kiwis ‘want me to try’ to get India trade deal despite hurdles

“The New Zealand people want me to try.”

The Prime Minister says he has no regrets when it comes to promising a free trade agreement (FTA) with India this term despite the significant hurdles he faces and his own admission that New Zealand needs to deepen its relationship with India first.

In an interview with the Herald on the Defence Force’s 757 plane heading back from the East Asia Summit (EAS) in Laos, Christopher Luxon also spoke about the “genuine concern” held by world leaders regarding regional security challenges, how he’s feeling nearly a year into the role, and how he is “used to working hard” amid an intense schedule.

And working hard he will have to to secure an FTA with India. Previous negotiations haven’t resulted in a deal, with the last formal set of talks held nearly a decade ago. India’s strong agriculture sector means it is hesitant to open its market up to other countries’ dairy products – a big barrier for New Zealand given dairy is a major export.

National last year promised that locking in an FTA would be a “major strategic priority” for it, should it win power. But during the election campaign – the one-year anniversary of the vote is just days away – Luxon went further, promising a deal would be secured in his first term.

There was a significant milestone this week in Laos when Luxon had his first meeting with Indian Prime Minister Narendra Modi. After having only previously spoken on the phone, the pair had substantial facetime in Vientiane, also sitting together at a dinner and speaking at the EAS.

During their bilateral, Modi invited Luxon to visit India, and Luxon said Modi did express interest in an FTA.

Prime Minister Christopher Luxon and India's Narendra Modi meet for the first time on the sidelines of the East Asia Summit in Laos. Photo / Jamie Ensor

He agreed India had become a dominant part of his trip.

“India is a place we have under-traded in and our two-way trade went backwards over six years and it is very, very small. So how do we then move that forward? This year has been all about relationships,” Luxon told the Herald.

He noted that Trade Minister Todd McClay had met on multiple occasions with his Indian counterpart and Foreign Affairs Minister Winston Peters had been to India already.

“You realise things start with a relationship level and then once you’ve got that, the transactional issues, what you are doing on trade, security or defence or people-to-people connections, you can work your way through.”

Given that need to first build a relationship, was it a mistake to promise an FTA this term?

“No. It is a big stretch goal and I get it. It will be hard and difficult. But I am confident. I would sooner try. I think the New Zealand people want me to try,” Luxon said.

“I am confident we are going to do well with India. Yes, there will be a lot of hard work, yes there will be a lot of negotiations, yes we will have to make trade-offs along the way. But that is something we really have to be intentional about.

“You can’t just turn it on and off, on and off, and flake in and flake out in a relationship like that.”

Two-way trade with India was valued at $2.93 billion in the year to June. To put that in perspective, India ranks 12th in terms of trading partners. New Zealand’s two-way trade with China, our largest trading partner, was valued at $37.84b.

Prime Minister Christopher Luxon in Laos.

‘Genuine concern’

While India became a major talking point for Luxon’s trip to Laos, he was officially there for EAS, an annual forum convened by the Association of Southeast Asian Nations (Asean) with a focus on strategic, political and economic issues. It’s well-attended, including by superpowers like the United States, China and Russia.

The Southeast Asia and wider Indo-Pacific currently face a variety of security challenges, including tensions between China and the Philippines in the South China Sea, the threat of conflict in the Taiwan Strait, and North Korea’s ballistic missile programme.

Luxon said these did represent “quite serious potential flashpoints” and believed in being open about them.

“You are better to be talking about it and be around the table with some very different views, as is represented at EAS for example, and try to deal with them before they overtake you and then they have huge implications.”

Asked about the tone of the conversations he had with other leaders at the EAS about these challenges, Luxon said “there is genuine concern”.

“You look at an issue like Myanmar and that has huge implications on neighbouring countries and many in Asean around refugees, for example, and that becomes destabilising for social cohesion within their societies.”

Numerous official reports, including from the Ministry of Defence and the Ministry of Foreign Affairs and Trade, have recently highlighted those challenges in the region and the implications for New Zealand.

The Prime Minister said one of the key messages he wanted Kiwis to hear was that economic prosperity is linked to strong security in the region.

“Security and economic issues are inter-related and you can’t do one without the other. That is why, if we have got values that we believe in, then we should be articulating and putting voice to those.”

‘Working hard’

With nearly 30 hours on the plane there and back, and a little more than 36 hours on the ground, the trip to Laos this week was something of a whirlwind.

But Luxon managed to pack a lot in. As well as multiple formal EAS and Asean events and the bilateral with Modi, the Prime Minister met with Cambodia, Laos, Vietnam, Thailand, the Philippines, Canada and Australia. There was also a brief chat with the new Japanese Prime Minister.

Asked what that intense schedule said about his style, Luxon said: “I move at quite a lot of pace”.

“I am used to working hard and it’s the way my corporate career internationally was like that, it was very common for me to be in a country for a day or two days and then be back to London or Chicago.”

Luxon, who spent a lot of time overseas while at Unilever, said he was “used to that intensity” and was taking that approach to his entire government agenda.

On whether his background meant he was more comfortable on the international stage rather than dealing with domestic problems, Luxon said the overseas part of the job was “an area I really enjoy”.

“I think you have got to be able to operate globally, regionally and locally. You want to be good at mastering all of those parts of the job. I really do enjoy the challenge of how do I unlock a relationship or create a relationship that unlocks value for New Zealand.

“Every leader is a different personality. We are not a medium-sized or a large country, we are a small country so people don’t need us, so the question is how do you get disproportionate share of mind in that leader so they want to build and deepen that relationship with us.”

But he said he also enjoyed wrestling with problems back home and looking for “common-sense solutions”.

“I really want results, outcomes and actions. We can talk about things for as long as you like but we have actually got to move and get things done.”

Luxon said about 10 months into being Prime Minister – the Government was officially formed in late November last year after lengthy coalition negotiations – he was “feeling really encouraged and more optimistic than ever”.

Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.