Luxon will meet with Modi for the first time in the very early hours of Friday morning (NZT), a milestone for the Government as it attempts to deepen economic and security ties with India. He’s hoping to head there next year in the footsteps of visits by Foreign Affairs Minister Winston Peters and Trade Minister Todd McClay.
Speaking to reporters in Laos, where Luxon is for the East Asia Summit, he said India’s large population and growing economy made it important for New Zealand.
“We want to be able to make sure we have a broadening and deepening of that relationship, that will help us both in a security sense but also in an economic sense as well.”
But the Prime Minister didn’t proactively raise the specific issue of an FTA in his initial comments.
That’s despite National previously being vocal about a deal being a “major strategic priority” and Luxon promising at last year’s election to secure a deal this term.
The promise has been called highly ambitious, especially given India’s protectionist agriculture policies. There are no formal negotiations currently ongoing, with the last round taking place in February 2015 – nearly 10 years ago.
Prime Minister Christopher Luxon speaks to reporters in Laos.
Asked by the Herald whether he wanted his meeting with Modi to kickstart those negotiations – and whether an FTA was possible this term – Luxon again spoke in general terms about his intention to “deepen our trading relationships”.
“It’s about establishing and building a relationship and from there we can talk about opportunities in trade and security,” he said.
The Herald put to him that he wasn’t mentioning an FTA and asked whether that was a sign he was walking back his election promise.
“No, we’re going to have a deeper trading relationship with India. No doubt about it ... that’s what we want to do is build out our deeper relationship and trading relationship with India.”
Luxon eventually said an FTA this term remained the Government’s commitment but wouldn’t go into what could be potential barriers for one.
“There’ll be a range of topics to discuss and there’ll be areas of disagreement and real challenge. But the point is, first and foremost, I want the relationship in place, which is what we’ve been working hard at over the last 10 months.
“Once we have a foundation of a relationship, then we can start to progress the more transactional conversations around trade and also around security.”
He acknowledged that to realistically reach an FTA this term, formal negotiations would need to open next year.
The Prime Minister wanted to get to India this year, but a visit is now more likely in the first half of next. He said that was down to logistical issues, with a number of international events – like Apec and Chogm – consuming both leaders’ time.
Prime Minister Christopher Luxon is welcomed in Laos by a military guard ahead of the East Asia Summit. Photo / Jamie Ensor
Trade and economic experts the Herald has spoken to suggest the Government should also be looking at enhancing business partnerships with Indian companies and also getting direct air connectivity.
“We should actually look at what we call as a comprehensive economic partnership, which means we are looking at an investment-driven long-term trade agreement where we are contributing to certain sectors in India through tech partnerships, through business partnerships,” AUT economic lecturer Rahul Sen said.
“It’s giving us a platform for New Zealand businesses to actually set up shop in India and export from there.”
Modi isn’t the only leader Luxon will be meeting with in Laos. He’s scheduled to have discussions with leaders from Cambodia, Laos and Vietnam. A three-way meeting is also happening with Luxon, Australia’s Anthony Albanese and Canada’s Justin Trudeau later on Thursday.
The East Asia Summit is an annual forum convened by Asean with a focus on strategic, political and economic issues. It brings together a number of senior global leaders, including from the US, China and Russia.
Luxon said having those bilateral discussions was important to building our relationship with the Association of Southeast Asian Nations (Asean). Asean is New Zealand’s fourth-largest trading partner, with room to grow further.
The Government wants to upgrade our relationship with Asean to what is called a “Comprehensive Strategic Partnership”.
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.
