Govt tests waters on new Asia trade pact

By JOHN ARMSTRONG political editor

New Zealand will hold exploratory talks with Hong Kong to try to forge another free-trade agreement, this time with its seventh largest export market.

The announcement comes just a day after Parliament endorsed the landmark free-trade deal with Singapore - its 13th biggest market - and just days before Asia-Pacific leaders discuss stalled global trade talks at their annual summit in Brunei.

After meeting Prime Minister Helen Clark and Trade Negotiations Minister Jim Sutton yesterday, Hong Kong's chief secretary Anson Chan confirmed informal discussions had already taken place. But she emphasised that Hong Kong remained committed to gaining greater trade liberalisation through multilateral bodies like the World Trade Organisation.

"These are very, very early days. Let's see where the exploratory talks take us."

Mr Sutton said discussions would now move to a more formal basis, although still short of formal negotiations.

Hong Kong, a North Asian "hub" economy which does not yet have any free-trade agreements with other countries, imports around $700 million of goods from New Zealand each year. In contrast, New Zealand imports around $160 million from Hong Kong.

Mr Sutton said New Zealand's closer economic partnership treaty with Singapore had stimulated interest within Apec.

Coupled with frustration in getting the next WTO trade round under way, that was prompting other countries to explore similar bilateral trade agreements.

Despite voting against the closer economic partnership treaty with Singapore, the Alliance will not block talks with Hong Kong.