Sutton still confident on US free trade pact

By COLIN JAMES

Trade Minister Jim Sutton is welcoming the naming of Australia on a shortlist of countries the United States will focus on to develop free-trade agreements, despite the fact that New Zealand is not on the list.

"I still believe we are on a parallel track [with Australia]," he said. "We're not off the list."

One ingredient of the United States' national security strategy released last weekend is to foster free trade. Included in that is a commitment to move ahead with bilateral free-trade agreements.

"Building on the free-trade agreement with Jordan enacted in 2001, the Administration will work this year to complete free-trade agreements with Chile and Singapore.

"Our aim is to achieve free-trade agreements with a mix of developed and developing countries in all regions of the world," the strategy says.

"Initially, Central America, Southern Africa, Morocco and Australia will be our principal focal points."

That will displease American farmers, who lobbied strongly this month to bar a free-trade agreement with Australia.

A day before the strategy release, US trade negotiator Robert Zoellick had mentioned Morocco, Central America and the Southern Africa customs union but not Australia.

"That is progress," said Sutton yesterday, since "as far as I know, that's the first list they've been on".

He said it "doesn't do us any harm", though he acknowledged that if Australia won a free-trade agreement with the US and New Zealand did not, there would be "some trade and investment diversion" from New Zealand to Australia.

New Zealand had encouraged the US to start negotiations with Australia, Sutton said, because "if it is not prepared to negotiate with Australia, it won't negotiate with us either".

Friendly interests in the US would make the case for a parallel agreement with New Zealand, and this country would continue to push its case vigorously.

* ColinJames@synapsis.co.nz