Trade talks on firm footing

By FRAN O'SULLIVAN assistant editor

New Zealand will not have to follow in the footsteps of Australia - which has let China off the hook on some tough World Trade Organisation obligations - to get a free-trade deal.

After wide-ranging discussions in New Zealand this week, China has accepted the fact that New Zealand, unlike Australia, does not impose discriminatory trade barriers against it.

The Government had been concerned China would also ask for explicit recognition of its "market economic" status as a quid pro quo for eventual negotiations on a free trade deal with the Asian powerhouse.

The Chinese Government demanded - and got - just such an assurance from the Government of Australian Prime Minister John Howard late last year.

The Australian Government also granted China a two-year relief period from various anti-dumping protocols laid out in a bilateral WTO accession agreement.

But visiting Chinese envoy Ma Xiuhong is satisfied New Zealand should not have to make similar concessions to begin negotiations.

The Commerce Vice-Minister told the Herald that China recognised New Zealand's position was different to Australia.

"We have to appreciate that the Government of New Zealand and also the trading regime and legislative system of New Zealand has never had discriminatory measures in terms of the formulation of trade policy and the implementation of trade policies," Madam Ma said.

Trade Negotiations Minister Jim Sutton affirmed Madam Ma had made that point to him personally after talks with his officials.

"We don't discriminate against China," Mr Sutton said. "We can make more rapid progress [than other countries] in our trade and economic co-operation negotiations, which include the possibility of negotiating an FTA."

The opposition yesterday made political capital out of the Ma visit.

National foreign affairs and trade spokesman Lockwood Smith claimed the Government had "once again insulted traditional allies Australia and the United States" through Mr Sutton's description of New Zealand's relationship with China as its most important.

Mr Sutton fired back, saying National MPs would be much better off to develop their own trade policy and work in the best interests of New Zealand, rather "than spend all their time trying to divine insults to other nations in what were perfectly innocent comments".

He reiterated that the US was the Government's "immediate top priority for a bilateral trade agreement ... but across the scope of the 21st century, the most important economy and trading relationship for New Zealand was that of China".

Greens co-leader Rod Donald said a free-trade deal with China would be a "nightmare for New Zealand's clothing and footwear manufacturers".

"Actually, there should be no more important relationship for this Government in the 21st century than the one it has with the people of New Zealand, including the ones that will lose their livelihoods from any deal with China," Mr Donald added.

Madam Ma wrapped up her New Zealand visit yesterday with a visit to an Akaroa farm in the South Island and discussions with dairy giant Fonterra which is in the process of forming a joint venture with a Chinese counterpart.

She flies to Sydney today to open "pre-negotiations" on a free-trade deal between China and Australia.