Labour, Greens in the hot seat over India free trade agreement

Analysis - Winston Peters' opposition to the India free trade deal has turned what could have been a huge win for the prime minister into a complex political scrap.

It puts Christopher Luxon's leadership under a spotlight, and gives Labour and the Greens the opportunity to exact political concessions from National in return for getting the deal over the line.

Luxon's commitment to secure such a deal in his first term - promised under pressure during a televised leaders' debate - was always going to be a tall order, with some calling it "ambitious", and others "implausible".

John Key's government tried and failed to get negotiations with India over the line, and Labour in the last term did not get to the point of launching formal negotiations.

Luxon securing one in just nine months is therefore either very impressive or an abdication of his responsibility to get the best possible deal for New Zealanders, depending on your point of view.

The agreement has been called a win-win by the likes of Infometrics, and industry groups have welcomed significant benefits in several sectors.

But better access for New Zealand dairy was always going to be the key prize in any India free trade agreement, and the gains there are at the margins with dairy exporters already expressing disappointment.

Winston Peters was quick to voice his own opposition, sending reporters a statement panning the "bad deal" a couple of minutes before the PM's media conference even began.

The NZ First leader maintains the gains are not worth the concessions granted to India - particularly the promises of three-year work visas and working holiday visas.

A savvy politician looking ahead to next year's election campaign, Peters will be eager to differentiate his party however he can to soak up votes from members of the public opposed to the deal. His position around the Cabinet table also gives him a head start in preparing that stance before opposition parties can do the same.

He has already labelled the deal's announcement politically motivated, and he may have a point. Reflecting the pressure Luxon was under, some of the first words out of the PM's mouth on Monday were that "this deal delivers on National's campaign commitment ... promise made, promise kept".

With the Trade Ministry confirming to RNZ "legislation will be required to bring the FTA into force, including some amendments to existing legislation and some new legislation specific to this FTA", the 'agree to disagree' invocation puts the ball firmly in the opposition's court.

Labour seems the most likely bet, having already signalled a willingness to support the "very small step" the deal represents. But trade spokesman Damien O'Connor's subsequent statement on Tuesday was headlined on a disappointment over dairy.

"The UK took three and half years to negotiate its FTA with India. These agreements cannot be rushed and it was naïve of Christopher Luxon to treat this as an election promise," he said, promising Labour would come to a final decision "in the new year".

That gives plenty of time for political manoevuerings to secure whatever gains Labour can from a bitter rival.

National's other options are limited.

Te Pāti Māori has ruled itself out, with co-leader Rawiri Waititi claiming the deal represents a lack of transparency, consultation with Māori and a too-weak Treaty of Waitangi clause.

"We haven't had an FTA that has a strong Treaty clause in it yet - that protects Māori interest, that protects Aotearoa's interests ... Tiriti o Waitangi is not just for Māori benefit, it also benefits the whole of Aotearoa to ensure that we're not subject to international and corporate exploitation."

He also agrees with Peters' criticisms about dairy and immigration, with the accusation of political motivation.

"I absolutely agree that this is a political decision. It's not a decision based on better economic growth here in Aotearoa, and that's what this country needs because National had failed in that particular area as well."

The Greens also decry a lack of transparency, but are keeping their options open. Trade spokesman Lawrence Xu-Nan has told RNZ the Greens recognise New Zealand was always unlikely to get favourable dairy terms, and they are not particularly concerned about the migration provisions.

But before finalising a position, they are demanding the full details of the agreement, and they want it publicly released.

"I think if the government is signing New Zealand up for something as big as this, then the people of New Zealand deserve a chance to have a look and make meaningful contributions," Xu-Nan said.

He also has concerns about whether non-tariff trade barriers for the likes of wood exports have been addressed.

National may view the Greens as not worth the effort, given what Xu-Nan says about the details they have seen so far.

"As far as I'm aware, there's been no contact with [us] on the NZ-India FTA from both MFAT but also from the minister, and like I said even the detail that has been released is very light ... we haven't had a chance to look at the text or any part of text.

"There should have been a broader transparency and consultation within Parliament, but also with relevant and key stakeholders and the general New Zealand public."

In National's favour, though, are the gains the deal would bring to industries other than dairy, and the foot-in-the-door it represents for New Zealand with an economy in line to be the world's third-largest.

Labour and the Greens will have to carefully weigh the potential to extract gains from National against the downsides that would come with being seen - by voters and international trading partners alike - to obstruct.

With other parties already committed one way or the other, a refusal would also present a juicy target for National and ACT to accuse them of scuppering a signed and sealed agreement for political gain.

It may come down to whether they think mutually assured destruction will leave them better off than their opponents, or whether acquiescing to those same opponents is worth the potential gains for the country and their support base.

National may be banking on those parties' principles winning out over their political instincts.

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