NZ trade model 'right for Asia'

By FRAN O'SULLIVAN assistant editor

Top US trade official Grant Aldonas has suggested the New Zealand model "may well have to drive" trade liberalisation in Asia.

Mr Aldonas - US under-secretary for Commerce (International Trade) - said a successful World Trade Organisation Round will deliver the "biggest bang for the buck" for both New Zealand and the United States.

But neither country could afford to neglect the fact that Asia would ultimately provide the strongest economic growth prospects - a factor which could draw New Zealand and the US towards a bilateral free trade agreement.

Mr Aldonas has said the US trade negotiating agenda is "stuffed full" for the next 18 months as the country's top negotiators focus on a successful completion of the Doha Round, precluding discussions on a New Zealand free trade agreement (FTA). There is also lingering sentiment within the US Administration over New Zealand's anti-nuclear policy.

"My own view is the best way to build a foundation for eventual talks on a free trade agreement is to focus hard on what the relationship between the United States and New Zealand in an FTA would represent as a building block towards greater regional integration," Mr Aldonas said.

The Asian growth model was export-led but there was still a "very mercantilist outlook with respect to imports".

"You can't look at New Zealand's track record economically and say that barriers to imports is the right approach," he said.

"That's the example that we need to take into the discussions with the rest of Asia - as we go forward - and we shouldn't be kidding ourselves where the real growth is going on in the world economy."

Mr Aldonas, who visited New Zealand for talks with Trade Negotiations Minister Jim Sutton, had little time to examine prospective collaboration in Asia at their formal meeting.

Mr Sutton described Mr Aldonas' proposition as "interesting", and said "New Zealand would be working with America to explore how to develop the concept further".

New Zealand may well have to drive it.

Mr Aldonas said later that New Zealand's success in the past five years "might have been the strongest evidence to the rest of the Asian economies that the right approach is to liberalise".

"If you really want investments, the right thing to do is to liberalise - particularly relative to where China is. The lesson is that we need as many models formed as possible and New Zealand's is one of those models."