O'Sullivan: NZ locks its teeth into more than lamb

By FRAN O'SULLIVAN

New Zealand will combine with the United States to try to have a new negotiating round launched at the World Trade Organisation this year.

That was the upshot of a meeting in Washington this week between Trade Negotiations Minister Jim Sutton and US Trade Representative Bob Zoellick.

It was the first time Mr Sutton and the US trade guru had sat down for formal discussions.

But they came out of the meeting with a clear view of the strategies and tactics necessary for a new WTO round to take place.

The Zoellick meeting capped a successful week's lobbying for the Mr Sutton, who travelled to Canada to test support for New Zealand's trade liberalisation strategies before hitting the Washington beltway.

But that was not Mr Sutton's only high point on the US circuit.

A WTO ruling that US restrictions on Australasian lamb imports are illegal was quickly claimed as ample demonstration of the value to a small nation like NZ of a rules-based trading system.

New Zealand's initiative in promoting global open skies policies also reached fruition when Mr Sutton joined Government representatives from Singapore, Chile, Brunei and the US to sign the Multilateral Agreement on the Liberalisation of International Air Transportation.

Mr Sutton's campaign to put some momentum back into multilateral trade liberalisation comes at a time when Washington is once again getting exercised over the value of free trade.

President George W. Bush has made it one of the defining elements of his economic programme.

US trade officials also want obstacles to the new WTO round cleared in time for the Apec meeting in Shanghai this year.

The meeting is seen as an ideal platform for the US and Chinese leaders to promote a timetable for the new round.

Officials admit that unless the US gets back into the game, by using its weight to ensure a new WTO round takes place, it will be left behind as other countries shore up regional trading blocs.

The focus will now shift to a special meeting in Paris on May 16, which WTO Director-General Mike Moore is holding alongside regular OECD talks.

The WTO process has been stalled since Seattle talks were scuttled in 1999, when less-developed nations exhibited mistrust that the US would open its doors. But at the Moore meeting, trade liberalisation champions such as New Zealand, Australia and the United States will join various emerging nations to work towards a solution.

"There are activities being initiated by Mike Moore in Paris that we are all likely to be involved with," said Mr Sutton. "But we have other fish to fry as well."

Mr Sutton said any doubts New Zealand might have had that the President's push for trade liberalisation on a multilateral basis was mere rhetoric, had been laid to rest in his talks with the US Trade Representative.

But Mr Zoellick's first priority is to achieve trade promotion authority - a mandate from the Congress and Senate to negotiate agreements.

The Zoellick team say that until trade promotion authority has been dealt with, the Administration will be cautious about other negotiations beyond those for which it has already established bipartisan support, such as the Vietnam agreement.

So proposals for a free trade agreement between New Zealand and the US will not move until the President has legislative approval for fast-track, or trade promotion authority.

But New Zealand is in the frame if the Bush Administration needs the demonstration effect of high-quality bilateral agreements to build support for broader multilateral deals.

Mr Sutton achieved his main objective to promote trade liberalisation with the US. Washington insiders credit New Zealand as a tough player, always punching above its weight, in the international trade game. But the skills of our negotiating team will be tested as it tries to act as a catalyst to restore the momentum of trade liberalisation.

The Sutton campaign benefited from the presence and planning of Ambassador Jim Bolger, whose status as a former prime minister makes him a formidable force on the diplomatic circuit.

Mr Bolger returns to New Zealand in February when his term expires. But his replacement, John Wood, held the Washington post for four years before Mr Bolger and is well placed to keep NZ's case moving.

Mr Sutton did not seek direct assurances from Mr Zoellick that the United States would start negotiations on a free trade agreement with New Zealand. Ironically, Australia has made much play out of prospective negotiations with the United States on a separate trade agreement, yet the Zoellick camp has accorded it no higher status than New Zealand.

Washington business players lump Australia and New Zealand together and would prefer a CER-Afta deal rather than separate initiatives.

Mr Sutton has said that New Zealand is ready and willing to negotiate, with Australia, or with Australia and others.

He will meet Australian Trade Minister Mark Vaille in Paris.

Mr Zoellick has considerable lobbying of his own to do before he has the numbers in Congress to pass a fast-track bill. Controversial trade sanctions to ensure signing countries abide by environmental and labour standards are proving a thorny issue.

The Bush Administration is working to a July 4 target date for congressional committee action on fast-track legislation.

It has two options - develop the trade promotion authority bill itself, or let Congress develop it.

As Mr Sutton says, the outcome of that debate in Washington is likely to set the parameters for the debate in the rest of the world

Let's hope that in New Zealand, anti-globalisation protesters take note of the WTO lamb ruling.

In Mr Sutton's words: "It is inconceivable that a tiny country like New Zealand could impose a solution on the world's biggest economy - that's why we are pushing to get momentum in world trade."