Singapore unease at treaty's trade impact

By LIBBY MIDDLEBROOK

Singapore's concerns over Treaty of Waitangi settlements have set back talks on a free-trade agreement.

Under negotiation since last year's Apec summit, the deal has partly been delayed because of Singapore's unease over how settlements could affect future investments in New Zealand.

The Closer Economic Partnership agreement was scheduled to be finalised last week, but has been held up following demands from Singapore that it contain written guarantees on the settlements issue.

New Zealand officials are understood to have initially resisted the demand, as they did not see the need for written assurances, but are now considering how the issue can be introduced into the agreement's text.

The other main sticking point in negotiations is New Zealand's desire to gain access to Singapore's protected services market, an issue Singapore officials are considering.

The aim of the agreement is to remove restrictions in the trade of goods, services and investment between New Zealand and Singapore by the end of the year, while setting a strategic example of free trade.

At present there are few tariffs on trade between the two countries, which is worth around $1 billion a year.

Despite the setbacks, both New Zealand and Singaporean officials are understood to remain committed to the agreement, but it is no longer likely to be in place by the end of the year.

Trade Negotiations Minister Jim Sutton refuses to comment publicly on the negotiations until the cabinet discusses the issues over the next two weeks.

A spokesman for Mr Sutton's office said the agreement was still on track and it had simply been delayed while the two parties resolved a couple of issues. A spokesman for the Ministry of Foreign Affairs and Trade, the organisation handling the negotiations, said these were not significant enough to warrant further face-to-face meetings between officials.

At present New Zealand has a closer economic relations pact with Australia and is also understood to be considering agreements with Chile and Korea.

The public will be able to have a say on the Singapore agreement when legislation on the deal reaches the select-committee stage.