John Armstrong: Optimism over US trade priorities

Barack Obama and John Key will chat again this weekend at Apec.

United States President Barack Obama may have some very good news after all for New Zealand exporters when he attends the annual Apec summit this weekend.

Indications firmed yesterday that the President will briefly touch on the potential expansion of the four-nation Trans Pacific Partnership, of which New Zealand is a founding member, into a much wider and more lucrative free trade agreement spanning the Pacific.

Mr Obama had been expected to outline his trade priorities in a speech tomorrow morning to the CEO Business Summit, which runs parallel to the meeting of the 21 Asia-Pacific economies.

But his late arrival in Singapore - he will miss a large chunk of discussions between the other leaders - meant that speech had to cancelled.

That left open the question of when he would spell out his trade imperatives and what he would say about using the TPP - also dubbed "TransPac" - as the means to achieve a much bigger end in terms of trade liberalisation.

Delegates focusing on Apec's trade agenda say it has been virtually impossible to read the White House's thinking on the TPP.

However, American Secretary of State Hillary Clinton shed some light by telling participants in the combined closed-door meeting of Apec trade and foreign ministers on Wednesday that the President would address the matter at some point this weekend.

Sources said the signals were positive, but cautioned that what Mr Obama would say would only amount to incremental progress towards what was a long-term objective.

"It won't be a big bang," said one source.

Even so, expanding the TPP to include the United States would go some way towards New Zealand missing out on a separate free trade agreement with Washington.

Trade Minister Tim Groser said he remained "doggedly optimistic" that at some point the United States would want to play a role in Asian economic integration.

"The TPP is one vehicle for doing it. I am sure they will come on board at some point. I am hopeful that we'll get a positive signal from the President in the next 48 hours."

The other members of the TPP are Singapore, Chile and Brunei. Australia, Vietnam and Peru have also expressed interest in joining the partnership, which the Americans see as a means to avoid being shut out of Asian-instituted free trade arrangements.