3. DARIEN FENTON (Labour) Link to this
to the Minister of Trade
What progress is being made towards a free-trade agreement with India?
Hon PHIL GOFF (Minister of Trade) Link to this
Excellent progress is being made. Last week, together with the Minister of Agriculture, I met with the Indian Commerce Minister, Kamal Nath, and we agreed that after two very positive and constructive meetings on a possible free-trade agreement, the study group set up to look at that agreement should make recommendations and report before the end of the year. We also agreed that negotiations should begin shortly after that. In fact, Mr Nath expressed the hope that those negotiations could be concluded as early as the end of next year.
Obviously it would be an extremely valuable outcome for a free-trade agreement to take place. India is the second most populous country in the world. It has an economic growth rate of about 8.5 percent, and an increasing number of people who have middle-class status and middle-class consumption patterns. Although our exports to India have grown significantly, they are still small, largely because of tariff and non-tariff barriers preventing the entry of our food and beverage exports. The removal of those barriers would create significant new market-access opportunities for our exporters. Even the National Party would have to agree with that.
The first reason, I think, is that we have put a lot of hard work into developing that relationship with India and with the current Minister, but also several factors have clearly helped. First is the fact that we have negotiated a comprehensive and high-quality agreement with China, and that is clearly assisting our efforts in getting the same sort of agreement with India, not to mention Korea and Japan. Second, the change in world commodity supply means that far from our high-quality food products being seen as a threat to swamping a market, there is a need on the part of countries like India to try to achieve food security. That is clearly helping not only our food and beverage exporters but also other exporters like agritech and biotech industries, which can assist countries like India quite strongly.