Free-trade talks with Asia begin to snowball

By LIAM DANN

Next year looks destined to be one of the most significant in New Zealand's trading history as multiple free-trade talks start with countries accounting for almost a third of the world's population.

Ministers from New Zealand, Australia and the Association of South-east Asian Nations (Asean) announced a timeframe for free-trade talks at a weekend meeting in Jakarta.

Negotiations are expected to begin next year, with a target of completion by 2007.

Asean is an emerging trading block consisting of Thailand, Singapore, Indonesia, Vietnam, the Philippines, Myanmar, Laos, Malaysia and Brunei.

It encompasses nearly 500 million people and is also one of the most significant growth areas for New Zealand meat and dairy exports.

The meat industry faces tariffs of up to 40 per cent in some Asean countries.

The Government has said it will soon begin consulting the local business sector about an Asean deal. Similar consultation about the proposed China deal is under way.

Negotiations with China are expected to begin early next year.

From Jakarta, Trade Minister Jim Sutton has also announced plans for a joint feasibility study into a bilateral agreement with Malaysia.

Negotiations have started on other deals, including a three-way agreement with Singapore and Chile and a bilateral deal with Thailand.

At the Ministry of Foreign Affairs and Trade, the calendar of chief trade negotiator Crawford Falconer is starting to look full.

He is optimistic that the Thailand agreement can be completed this year and the P3 agreement - with Chile and Singapore - can be sewn up early in the new year.

That would free up resources for the more complicated China and Asean talks.

All the deals are the result of years of behind-the-scenes work, said Falconer.

"Things come to a critical mass and start to generate a bit of momentum. That's a phase we are in at the moment."

The move with China boosted New Zealand's profile with potential trade partners, he said.

"It's by far the biggest potential development and it leads people on to want to join up the dots."

Asean had its own agreement with China and seeing NZ working with the people's republic probably had an impact on the way the others dealt with us, Falconer said.

The NZ Government - and the big agricultural concerns such as Fonterra and Meat and Wool New Zealand - still see multilateral World Trade Organisation talks as the best way to achieve free trade in farm products. But all parties agree that a pragmatic approach to bilateral agreements is a crucial back-up strategy.

Falconer said the current buzz phrase was "regional architecture". A web of bilateral and multilateral agreements was growing across the Asia Pacific region and New Zealand needed to be part of that.

Bruce Goldsworthy of the Employers and Manufacturers Association said his members were realistic about the importance of trade deals but wanted to see the negotiations handled well.

"You won't see us marching on Parliament," he said.

"We're not saying, 'Don't get involved in free-trade talks', but we don't want to see the Government give everything away."

Manufacturers were not scared of competition but had some concerns, particular about the deal with China. Protection of intellectual property was top of the list.

The Government also needed to ensure that the regulatory regimes in the various countries were fair and comparable to our own, said Goldsworthy.

Finally, as a backstop, the Government should maintain access to trade remedies - such as anti-dumping laws - to prevent any possibility of predatory pricing by free-trade partners.