By FRAN O'SULLIVAN
Too difficult, too politically risky, the United States will never entertain it because it is not in the interests of its own powerful agricultural lobby - so let's put it back in the too-hard basket.
That sums up much of the political establishment's views over the case for a New Zealand free trade agreement with the US.
The issue has floated around the foreign affairs agenda for the best part of a decade.
Prime Minister Helen Clark has a standard "ready when you are" stance.
She will meet President George W. Bush at the White House next week.
But she is not about to get her nose publicly bloodied by openly asking for a deal the President cannot make in a congressional election year - or so her foreign affairs minders suggest.
Which is a pity.
A report from Washington suggests New Zealand does have a case to lift its debate on a free trade deal to a more strategic level instead of the narrow economic argument which has characterised previous discussions at trade officials' level.
The Institute for International Economics released its report on a case for a model free trade agreement between the two countries on Friday.
The report, written by director Fred Bergsten, suggests the US should respond positively to New Zealand's desire to pursue such a pact and "begin the effort as soon as possible".
Bergsten says such a deal would enable the US to strengthen its free trade credentials.
Such a deal would:
* Help restart and accelerate the momentum of trade liberalisation.
* Contribute towards the Apec goals of free trade and investment in the Asia-Pacific region by 2010.
* Reduce the risk of polarisation within the Asia-Pacific between competing trade blocs in East Asia and the Americas - a development which "would push the world toward a tripolar configuration that could be extremely dangerous in security as well as economic terms".
By negotiating a deal with New Zealand, the US would recognise New Zealand's innovative reforms of the past two decades and offer incentives for other countries to do likewise, says Bergsten.
Asking influential US economist Bergsten to examine the case for a model free trade agreement between the two nations was a bit of a punt.
Former Washington ambassador Jim Bolger and the president of the United States-New Zealand Council, Fred Benson, persuaded Bergsten to take on the commission.
Bergsten is not your average hired gun. His credentials are such that he would not have jeopardised his reputation by dishing up an unwarranted case.
He is well connected in the US Eastern seaboard establishment, and has strong contacts at the International Monetary Fund and on Capitol Hill. The director of the institute since its creation in 1981, Bergsten has held influential positions.
He chaired the Competitiveness Policy Council in the early 90s - a creation of the US Congress - chaired the Apec Eminent Persons Group from 1991 to 1995, and has held senior positions at the US Treasury, the National Security Council, the Brookings Institute and the Council on Foreign Relations.
Bergsten has also written books such as No More Bashing: Building a New Japan-United States Economic Relationship (last year), Whither Apec? The Progress to Date and Agenda for the Future (1997) and Global Economic Leadership and the Group of Seven (1996).
Alex Sundakov, the director of the New Zealand Institute for Economic Research, estimated that New Zealand stood to gain at least $1 billion from increased access to the giant US market.
Sundakov's analysis - presented at December's Creating Coalitions of Interest conference in Auckland - did not quantify potential gains for the US of such a deal.
At that conference, sentiment was rife that although there was a good case for a free trade agreement from the New Zealand view, there was much less in it for the US.
But the Bergsten analysis raises the debate to a new level.
A detailed assessment of the economic benefits is in the report.
New Zealand stands to gain US$732 million ($1.67 billion) in increased exports to the US, and US merchandise exports to New Zealand would increase by 25 per cent.
The report suggests it would make more sense for the US to negotiate a three-way deal with New Zealand and Australia.
Bergsten's analysis relies on an assessment of the economic effects of US free trade deals by Utah State University academic John Gilbert, using a computer simulation model.
This finds that the US would score substantial increases in merchandise trade Down Under by negotiating either a bilateral New Zealand deal, a bilateral Australian deal, or a three-way deal (see table). The analysis does not take account of the favourable factors which invariably operate if the economies of free trade agreement partners are more closely integrated.
New Zealand's agricultural base has previously been regarded as a prime sticking point, as the US has a protected agricultural regime.
But the increase in US exports to New Zealand - under the various scenarios examined - also includes big increases in agricultural exports.
Bergsten suggests the increased competition that such a deal would bring would lead to increased competitiveness in the US dairy industry - music to the ears of Federated Farmers.
Bergsten's report does not touch on the increasing protectionism within the US - the Farm Bill, which will increase agricultural subsidies, and Bush's decision to put tariffs of up to 30 per cent on steel imports.
But there are few obstacles that would create negotiating difficulties, he says.
New Zealand has reformed the single-seller producer marketing authorities, abolishing export monopolies.
There is a case for both the US and New Zealand to use their free trade negotiations to work out deals to handle farm trade problems, that could then be applied in the wider WTO and Apec contexts.
Parallel importing, intellectual property measures and the operations of Pharmac have all been raised by US firms as potential barriers to a free trade deal. Bergsten says in reality the list of contentious issues is short.
His focus is on the impact a deal would make because of the present "potentially dangerous" global trading environment. Despite the declarations at Doha to start a new WTO round, and at Quebec City to begin serious negotiations for a Free Trade Area of the Americas, it is unclear how far or how fast either would move, says Bergsten.
His report lists credible arguments to support a free trade deal.
It is now up to Clark and her officials to put them to the President and the White House power players.
* Disclosure: Fran O'Sullivan is a board member of the NZ/US Council.
The Case for a Model Free Trade Agreement between the United States and New Zealand