Fran O'Sullivan: NZ Inc must forge ahead on trade

Where's the plan, Mr Goff?

The international trade game is about to be played in deadly earnest but, judging by yesterday's responses to the World Trade Organisation crisis, New Zealand needs to abandon any attempt to flog a dying elephant into a trot and look for new priorities.

WTO director-general Pascal Lamy's decision to kick into touch the Doha Round talks which had promised a "once in a generation" chance for the most powerful nations to deliver increased prosperity to poorer countries was hardly a surprise.

Lamy had been urged by many influential figures to pull the plug on the talks and allow time for a practical solution to the impasse to emerge.

New Zealand could adopt its usual response to Lamy's realistic move and yet again talk tough and paint European farmers as the obstacle.

But that's been said before. Right now, it's the alternative plan that is needed.

The WTO talks basically fell apart because the three crucial figures at the G8 heads of government meeting - the United States' George W. Bush, Germany's Angela Merkel and France's Jacques Chirac - stuck to their corners and refused to make further concessions on agriculture access.

Representatives of the G20 nations present in St Petersburg such as India and Brazil were not going to offer access to their own industrial markets unless the Big Two agricultural protectionists moved again and first.

So nothing happened.

Experts suggest that without some sort of miracle, no significant progress will be made in further trade liberalisation at the multilateral level until the political cycles in the US and France turn.

As was abundantly clear at the WTO's Hong Kong ministerial meeting last December, the European Union is hampered by French intransigence. The EU Budget, which covers farm protection subsidies, is up for review next year.

There will also be an election in France that year, which gives hope that some free traders may get into power rather than the present protectionists and support the efforts of the EU's Trade Commissioner next time negotiations start in earnest.

Bush loses his presidential authority to sign trade deals next year. His successor as President will inevitably be faced with getting a new Trade Promotion Authority from the reconstituted Congress.

It's too early to foreshadow the outcome at the multilateral level.

But New Zealand needs to get on to a war footing quickly to secure its international trading status.

Here are a few pointers:

1. Forge an NZ Inc response now to address the looming uncertainties rather than wait for the Government to herd cats behind its 2007 Export Year initiative or make new trade initiatives at the regional and bilateral level.

The collapse of the WTO talks is the reality test as far as New Zealand's exporting community is concerned.

Put to one side the New Zealand Institute's push for new initiatives to help prospective exporters and investors make a better fist of it abroad. The reality is that other countries will now be competing to sign bilateral and regional deals as fast as they can.

Trade Minister Phil Goff is right to say that we have never left all our eggs in the WTO basket. But it's time to forge a much more open consensus over what the new priorities should be.

2. Drop the "keep them in the dark and feed them bulldust" approach that has characterised foreign affairs and trade officials dealings with the media since NZ First leader Winston Peters was appointed Foreign Minister.

For a small, smart trading nation, New Zealand's officialdom is astonishingly tight-lipped when it comes to telling the public and business community - through the media - just what the state of bilateral trade negotiations is.

Want an example? Take a look at how the Ministry of Foreign Affairs and Trade and its Australian counterpart are handling the communications components of their respective free trade talks with China.

The Australian ministry openly discusses the details of each round of talks to ensure exporters are well informed about the trade-offs. The New Zealand ministry issues anodyne statements that give no details away. Privileged exporters with big trade negotiation teams such as Fonterra can get the information through the back door. But, at a public level, the disclosure is woefully underwhelming.

3. Get the New Zealand business community working together.

Plans to create a New Zealand Business International-type organisation to ensure a real focus on using the outcomes from trade talks is yet to publicly germinate although discussions began more than nine months ago.

The discussions have foundered on the usual inter-organisation rivalries which hold up progress.

If the parties can't use the WTO crisis to overcome their differences, they should question whether they are the right people to lead change in the first place.

4. Ensure Jim Sutton's role as a $40,000-a-year roving trade ambassador is not simply a kiss-off job for clearing out of the Cabinet quickly to make way for new Labour blood.

Sutton will give his valedictory speech in Parliament today and, if Goff is on cue, he needs to have the former Trade Negotiations Minister's first assignment worked out before the show is over.

Again, it's consensus that is needed, not rivalry. If Sutton can use his contacts to open bilateral doors, he needs a brief.

5. Neutralise the Peters factor or turn his talents more squarely to New Zealand's advantage.

Put aside the furore between the Foreign Minister and press gallery journalists. Monday's 30-minute row between Peters and senior media representatives was the usual "I said-you wrongly reported" ministerial berating that has become all too commonplace. But it's a sideshow from the main game in town - ensuring New Zealand's place in the world.

Peters will again be the man on the spot at the Asean Foreign Ministers' talks this weekend, one of the first major regional meetings since the WTO impasse was officially declared.

Other foreign ministers will inevitably discuss moves to forge an Asean free trade block around the forum's fringes. But Peters still maintains the absurd charade that trade and foreign affairs can be kept separate - they can't.

If Helen Clark brought Peters into the Cabinet, much of the clamour over the ridiculous constitutional arrangements would subside.