NZ 'on track' for deal with China

BEIJING - Chinese Commerce Minister Bo Xilai has signalled that New Zealand is still on track to be the first Western developed country to negotiate a free trade deal with China.

After breaking off from intensive talks with Trade Negotiations Minister Jim Sutton in Beijing yesterday, Bo said it was completely possible that New Zealand would achieve a "fourth first" with China.

He said the Ministry of Commerce would work closely with its New Zealand counterparts to push negotiations to a conclusion.

The meeting - the first discussion on the free trade agreement (FTA) since Helen Clark met President Hu Jintao and Premier Win Jiabao last week - comes before a fourth round of formal negotiations in Beijing.

Sutton warned that despite a constructive meeting, there would be some tough negotiations ahead as each side tried to bridge differences. There were differences over how comprehensive the deal should be and issues over its content.

He said the speed of China's dairy liberalisation, which New Zealand expected to be a major win from the FTA, remained at issue but he hoped for a "mutually beneficial" result.

Sutton said there could also be difficulties with wool, where New Zealand has experienced quota problems, and with meat, where China disrupted trade last year by failing some works at inspection.

Differences had also emerged over services but it was inappropriate to go into areas being negotiated.

"We are seeking an end point where all tariffs are eliminated - now whether that's attainable still remains to be seen."

Bo said New Zealand should be congratulated for being the first country to sign a WTO accession agreement with China, the first to recognise it as a market economy and the first to open talks on a bilateral deal.

"As a matter of fact, the fourth first to be negotiated is what both leaderships are looking forward to.

"Sutton is a wise guy. I know he enjoys kiwifruit every day."

The pair co-chaired the first meeting of a Joint Ministerial Commission on Monday.