Election deal over crucial Seattle talks

By Brian Fallow

WELLINGTON - National and Labour have struck a deal over who should represent New Zealand at the Seattle meeting to launch the next round of world trade talks, which starts three days after the general election.

Trade Minister Lockwood Smith said yesterday that Prime Minister Jenny Shipley and Opposition leader Helen Clark had agreed that if the election outcome were unclear - or it looked as if Labour could form a government - then both he and Labour's trade spokesman, Jim Sutton, would go to Seattle. "If we [National] have won then clearly I will go."

Dr Smith has just returned from a trade ministers' meeting in Lausanne, Switzerland, intended to advance the preparations for the Seattle meeting, now just four weeks away.

The Lausanne meeting had not accomplished what it might have in terms of sorting out common ground and focusing on the remaining areas of disagreement, Dr Smith said.

But the talks, which included the European Union, agreed on a three-year timetable for the coming World Trade Organisation talks. There had been fears that the EU would frustrate this by overloading the agenda for the WTO round.

The United States confirmed its support for comprehensive negotiations on industrial goods, considered crucial if there was to be agreement on sectors such as fish and forestry, which were of interest to New Zealand, Dr Smith said.

It was also encouraging on the agricultural front that the new EU Trade Commissioner, Pascal Lamy, had said the EU was prepared to negotiate on export subsidies, domestic support and market access.

"While it was good to hear him saying that publicly, I think we will find the [EU] member states pulling him in a bit. It's going to be hard work."

The EU, with Japan, Korea, Norway and Switzerland, have been arguing that agricultural support programmes are justified by the sector's importance in maintaining rural employment, infrastructure and the environment.

The Cairns Group of agricultural free-traders, scenting protectionism, respond that many other industries are multifunctional in that sense and it is nonsense to single out agriculture on those grounds.

Dr Smith said it would be more constructive to say that policies to boost rural employment and trim hedgerows and so on were fine, provided they were decoupled from production and did not distort trade in any way.

Dr Smith also visited Washington to lobby officials on Project Five which, as he suspected, had rather dropped off the Clinton Administration's priority agenda.

New Zealand wants the Americans to agree to a study of the ramifications of a free-trade agreement between the US, NZ, Australia, Singapore and Chile.

"Before any negotiations could begin we need a study of how we would handle such things as sensitive agricultural sectors, labour and the environment, and other countries which might seek to join such an agreement," Dr Smith said.

"It's touch and go. I doubt the various departments concerned [Agriculture, Commerce, State, Treasury and the US Trade Representative] will be able to arrive at a consensus view to put before President Clinton."

But the Government was still hopeful of receiving a US response this month.