Australia 'could put in good word' for NZ, says Roundtable

11.45am

Warning signs New Zealand has been shut out of a free trade agreement with the United States may mean it has to ask Australia for help, a leading business commentator said today.

Roger Kerr, executive director of the Business Roundtable, said his organisation had been very concerned for some time that the US had linked trade with political and other security considerations even though New Zealand was seen as an attractive partner in a free trade agreement.

US Trade Representative Robert Zoellick dashed hopes of a free trade agreement yesterday, citing too many objections from US farmers.

He also said the US was disappointed with recent actions by New Zealand. Although he did not elaborate, it was widely considered that referred in part to New Zealand's refusal to send troops to support the war in Iraq.

Miss Clark also had to apologise to US President George W Bush's administration last month for comments that the US would not have invaded Iraq if Al Gore was president.

However, Mr Kerr said Australia, which was negotiating an agreement with the United States, was very favourably disposed towards New Zealand.

If the New Zealand Government could repair some of the damage, a NZ-US free trade agreement could be salvaged, possibly if Australia helped by putting in a good word for New Zealand.

Mr Kerr said New Zealand needed to be connected with other world markets.

"That is important...but more importantly are the business and investment links that would flow from a trade agreement with the US and also wider benefits in terms of entrepreneurship, cultural influences and constitutional influences which make the US such a successful place and hopefully some of that would spill over."

He said one of the key impediments to an agreement was New Zealand's 1987 ban on American nuclear ships was still being felt, was still being linked with trade considerations and which had been an underlying issue for some time.

However, he said farming issues, the nuclear ships ban and New Zealand's stance over the war in Iraq, were all evolving issues.

"These things are not set in concrete for all time, but I think the signals clearly at the moment are negative."

Mr Kerr said the New Zealand Government could restore the move towards an agreement.

"I think it will require the New Zealand Government to show sensitivities to the US concerns and address the issues that might stand in the way of a free trade agreement and repair any damage that's been created.

"Equally, it should try to use progress with the negotiation with Australia to try to encourage the US administration to look at New Zealand in a more positive light than it seems to be doing at the moment," Mr Kerr said.

- NZPA