New Zealand and India have signed a Free Trade Agreement (FTA) that will create more jobs and higher incomes for Kiwis.
According to Prime Minister Christopher Luxon, the benefits of this FTA are widespread, and the business community is excited to see the doors of opportunity open to 1.4 billion people whose economy is set to become the third largest in the world.
“One in four jobs are tied to trade. In signing this FTA, we are setting businesses up to succeed, boosting Kiwi jobs and enabling economic growth, and that means more money in Kiwis’ pockets," he said.
At the same time, Trade and Investment Minister Todd McClay added that the FTA supports New Zealand’s ambitious goal of doubling the value of exports in 10 years.
“Creating opportunities for our businesses to diversify and create strong trading relationships provides economic security for New Zealanders, and that is crucial in these times of global unrest," said McClay.
The signing ensured New Zealand is on track to benefit from a Most Favoured Nation clause for wine and services exports, whereby the better access the European Union has secured for its wine and services will be extended to our exporters if our agreement comes into force first.
That clause will be worth tens of millions of dollars in extra exports for the New Zealand economy.
“Two-way trade is currently NZD 3.95 billion. The deal we have struck and the relationship we have built will grow this exponentially and deliver deep and lasting benefits for generations to come," added Luxon.
Key outcomes for New Zealand include:
- Tariff elimination or reduction on 95 per cent of New Zealand exports.
- Duty-free access on almost 57 per cent of New Zealand’s exports from day one, increasing to 82 per cent when fully implemented, with the remaining 13 per cent being subject to sharp tariff cuts.
- Immediate tariff elimination on sheep meat, wool, coal and over 95 per cent of forestry and wood exports.
- Duty-free access on most seafood exports, including mussels and salmon, over seven years.
- Duty-free access on most iron, steel and scrap aluminium, over 10 years or less.
- Duty-free access for most industrial products, over five to 10 years.
- 50 per cent tariff cut for large quota of apples – nearly double recent average exports.
- Duty-free access for kiwifruit within a quota almost four times our recent average exports, and tariff halved for exports outside of quota.
- Duty-free access for cherries, avocados, persimmons and blueberries, over 10 years.
- Tariffs on wine reduced from 150 per cent to either 25 or 50 per cent (depending on the value of the wine) over 10 years plus a Most Favoured Nation (MFN) commitment.
- Tariffs on mānuka honey cut from 66 per cent to 16.5 per cent over five years.
- MFN status and liberalisation across services exports.
- Duty-free access for dairy and other food ingredients for re-export from day one.
- Duty-free access for bulk infant formula and other high-value dairy preparations over seven years.
- 50 per cent tariff cut for high value milk albumins within a NZ-specific quota equal to current export volumes.
More local FMCG news here
