Free-trade optimism despite US move

Trade Minister Tim Groser

Trade Minister Tim Groser is hopeful negotiations on a free-trade agreement with the United States will be restarted by the end of the year despite the American decision to indefinitely delay the first round of talks.

The United States has put on hold scheduled talks with the grouping of Trans Pacific Partnership countries - including New Zealand - while key appointments are being made to the Trade Representative's office, including congressional confirmation of US Trade Representative Ron Kirk.

President Barack Obama's new Administration also wants to review its position on free trade before beginning talks which the US signed up to last September when George W. Bush was still in office.

The talks were due to begin on March 31 in Singapore and followed the United States' decision to begin negotiations with the initial grouping of countries in the partnership - New Zealand, Singapore, Chile and Brunei.

Australia and Peru then also joined in and Vietnam has expressed interest and was to attend the talks as an observer. The agreement is NZ's best chance to secure a free-trade arrangement with the United States.

Yesterday, Prime Minister John Key said he was "deeply disappointed" by the delay, and New Zealand would continue to push for the talks to begin.

Mr Groser said it was "prudent" to delay until the key political appointments in the new Administration were made and it had confirmed its stance. "It's really important that the United States is given a bit of space on trade issues. This new Administration is facing formidable problems on trade issues. I'm extremely confident they will come out the right side, but it's very important they make their own decisions."

Mr Groser said informal signs about the agreement were positive, and he "hoped and expected" the United States would give the green light for negotiations to begin by the end of this year.

He said Secretary of State Hillary Clinton mentioned the partnership during her acceptance speech, and several major lobby groups were also supportive, although there were expected objections from the dairy industry.

Labour leader Phil Goff - who signed the initial agreement with the United States as Trade Minister last September - said he also expected it would be a short delay and the United States would opt to go ahead with the talks.

"It would be keen not to be excluded from free-trade access to the most economically dynamic region in the world."

NZ-US Council executive director Stephen Jacobi said he was confident it was simply an administrative delay by the United States. "A short delay at this point will not affect the outcome."

Mr Jacobi said the agreement was supported by a number of major organisations in America, including the US Chamber of Commerce, the National Association of Manufacturers, the Coalition for Service Industries and the National Foreign Trade Council.