Door open to US free-trade deal

By BRIAN FALLOW economics editor

Trade Negotiations Minister Jim Sutton is off to Washington with a "ready when you are" message on one of New Zealand's longstanding trade policy goals, a bilateral trade agreement with the United States.

Mr Sutton said he was most encouraged by what Bush Administration officials told Foreign Minister Phil Goff during his visit last month about US readiness to discuss regional or bilateral trade liberalisation.

Mr Sutton said that when he talked to his American counterparts, US Trade Representative Robert Zoellick and Agriculture Secretary Ann Veneman, he would reinforce New Zealand's readiness to be involved in any such discussion, in whatever form suited the US and as soon as it was ready to move.

"In my view, a trade liberalisation arrangement with New Zealand would be a natural extension of the United States' own plans for liberalised trade arrangements with Singapore and Chile."

Though the prospect of a bilateral trade deal with the US has been dangled in front of New Zealand before, it has been frustrated among other things by the lack of fast-track negotiating authority. This is legislative authority for US officials to negotiate a trade deal, leaving to Congress the right only to vote yes or no, not to take the agreement apart and relitigate it.

"It is clearly top priority for Robert Zoellick to achieve this 'trade promotion authority' as it is now known," Mr Sutton said.

Even if the authority were restricted to a Free Trade Agreement of the Americas and a multilateral World Trade Organisation round, it would create an environment in which narrower agreements could be pursued, as a fallback option for runs on the board should more ambitious liberalisation agendas get frustrated.

A trade deal with the US would have to include agriculture, Mr Sutton said, "but we are prepared to be flexible to get a comprehensive agreement. If that means allowing time for sensitive sectors and industries [to adjust], then that would be something we would be prepared to negotiate."

Australia has already embarked on discussions with the US over a bilateral agreement.

"I wouldn't mind if we annotated individually or together [with Australia], but there would be an advantage for each of the parties if negotiated together," Mr Sutton said.

Australian Trade Minister Mark Vaile had assured him Australia did not want to clamber over New Zealand to get a deal with the US.