KEY POINTS:
Democrat success in the US mid-term elections last week is not necessarily bad news for hopes of a free-trade agreement between New Zealand and the US, says the head of the United States-New Zealand Council.
"The conventional wisdom is that the Republicans are pro-business and pro-free trade and the Democrats are not so big on either one of those," said John Mullen, the council's Washington-based president, while visiting New Zealand last week.
"But business did just fine in the 1990s under the Democrat Administration."
The main hurdle to starting free-trade negotiations was the looming expiration of the Trade Promotion Authority (TPA), which gave the US Presidential Administration the right to negotiate free-trade agreements, said Mullen.
Under the authority - which is due to expire in June and is unlikely to be renewed - any agreements still need to be passed by Congress, but they cannot be altered.
Overall, the relationship between New Zealand and the US had been improving, he said, which would help New Zealand's free-trade ambitions.
"I would suggest that the overall climate for this is better than it has been. I think it is a matter of when not if, but I think the near term is a problem," he said.
"Whether or not that will happen during the remaining two years of the Bush Administration, I think it's probably unlikely, both because of the expiration of the TPA and because I suspect that trade will not be at the forefront of the Democrats' agenda.
"That said, if the Democrats wanted to prove their interest in free trade, New Zealand would be the poster-child candidate for them."
New Zealand could be a popular choice among Democrats for free-trade negotiations because it did not have the environmental problems or cheap labour that some other nations did, he said.
Nonetheless, the US Trade Representative has only a limited budget and is in negotiations with South Korea and Malaysia, so it is unlikely to be able to pay too much attention to New Zealand in the near-term.
Pushed for a date on when talks on a free-trade deal between New Zealand and the US might begin, Mullen suggests "relatively soon" after the 2008 presidential elections. "That will be a fresh start on everybody's part regardless of who wins."
