Fran O'Sullivan: Ardern draws line in sand on US Free Trade Agreement

Prime Minister Jacinda Ardern talked about trade in Melbourne. Photo / AP

Prime Minister Jacinda Ardern has stipulated three clear bottom lines which will have to be met for negotiations between New Zealand and the United States on a free trade deal to proceed.

Ardern disclosed her bottom lines in response to questions from this correspondent after Foreign Affairs Minister Winston Peters made a bold pitch for a bilateral FTA in Washington DC last week bluntly telling the US "You're missing out!"

The Foreign Minister told an influential audience at the prestigious Centre for Strategic and International Studies (CSIS) that there were "obstructions and difficulties" in all trade negotiations however his "utter focus" was to get bilateral negotiations started.

But Ardern cautioned that any FTA negotiations must be on New Zealand's terms.

"So, in starting the conversation our terms are very clear - Pharmac, our right to regulate and the Treaty of Waitangi will not be compromised."

Asked if she wholeheartedly backed Peters' bold pitch to start FTA negotiations, Ardern responded:

"I support the expansion of our free trade agreements be it through the EU FTA, be it through RCEP, be if through the Pacific Alliance.

"As a government we have been pursuing trade deals which add greater diversity, which build greater resilience and which openly create more opportunities for exporters."

Asked for specifics, she said: "And I include the United States in that. But also we are realistic. Of course we see some messages around the approach to trade generally.

"Of course we are continuing to fight against the tariffs that we've had imposed against us on aluminium and steel in New Zealand but the fact we continue to push back on that demonstrates to you that there are benefits for us in an FTA,'' said Ardern.

"But it has to equally serve New Zealand's interests that includes protecting Pharmac, protecting our right to regulate and protecting the Treaty of Waitangi."

Peters' pitch for an FTA to US Vice-President Mike Pence and senior Trump Administration figures like Secretary of State Mike Pompeo, was couched in both economic and strategic terms.

While the bilateral relationship had strengthened, "limited engagement" by the US in trade agreements in the Indo-Pacific was of real concern to New Zealand.

Peters told the CSIS audience the US had 20 free trade deals - 13 of them with economies smaller than New Zealand.

Foreign Minister Winston Peters made a bold pitch for a trade deal to the US. Photo / Marty Melville

"We are only one of nine countries with an unbroken line of democracy since 1854 ... I think good nations should be rewarded. And bad nations be punished. Not the reverse which is what I am seeing. Some of the bad ones are getting all the rewards and some of the good ones ignored. You wouldn't do it as a mother or father. You shouldn't do it as an international body either."

US President Donald Trump pulled the US out of the Trans-Pacific Partnership Agreement (TPPA) – which New Zealand signed-up to - in 2017. There some hard sticking points on dairy and Pharmac during the negotiations.

An updated version - the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - was signed by the Labour-New Zealand First Government in March last year after policies they have railed against were changed.

New Zealand is currently in free trade negotiations with the European Union, India and the Pacific Alliance (Chile, Colombia, Mexico and Peru).

NZ is also a participant in negotiations on a Regional Comprehensive Economic Partnership which comprises the 10 Asean nations and six other Indo-Pacific nations (including NZ).

US Secretary of State Mike Pompeo. Photo / AP

Negotiations are continuing on the upgrade of the NZ-China free trade agreement and FTA negotiations with the Russia/Belarus/Kazakhstan customs union remain suspended.

The Prime Minister also underlined, following her meeting with Australian Prime Minister Scott Morrison in Melbourne, that he shared her view it was time for the US to play a greater role in the region.

"We are all singing from the same song sheet. We're promoting global trade we're calling for attention to the activity in the Asia Pacific.

"Between New Zealand and Australia, there's an opportunity for the both of us to continue to support rules-based trading regimes.

"It is ultimately us as a small trading nation that will suffer if we see more countries look more inwardly off the back of some of those heavily nationalist agendas.''

The US is New Zealand's third-largest individual trading partner. It's a major market for agricultural products such as dairy.

In August last year, US President Trump signed the KIWI Act. It will allow New Zealanders to apply for E1/E2 trade and investment visa.