Apec members in trade tango for best deals

By FRAN O'SULLIVAN at Apec

SANTIAGO, Chile - If all the many flirtations New Zealand is having with a raft of high-powered Asia-Pacific nations here reach fruition, the country easily stands to benefit by up to $1 billion a year through increased trade.

This year's Apec meeting is like no other.

Traditionally, New Zealand waves the free trade flag, arguing earnestly that it is time the 21 Asia-Pacific countries that make up Apec focus on achieving their goals for free and open trade by 2010.

But this year self-interest dominates.

The China deal alone - on which Prime Minister Helen Clark and Chinese President Hu Jintao announced negotiations on Saturday - is worth up to $400 million to New Zealand annually.

Toss in a possible United States free trade deal, a planned deal with the Southeast Asian bloc (Asean), a Pacific Three (P3) deal between Chile, Singapore and New Zealand, other bilaterals such as Thailand and Malaysia, and the opportunities for New Zealand exporters to increase their business opportunities becomes very rich.

There has even been the sniff of a maybe-deal with Russia eventually.

What was a slow trade dance has turned into a fast-moving tango, with many of the other Asia-Pacific nations, particularly China and Chile, moving at rapid speed.

China's push has been so rapid that US business interests have become concerned that it is taking influence away from America as the regional superpower.

Even President George W. Bush was prompted to say the US was going to be very aggressive about bilateral and free trade deals.

Mr Bush ducked out of a political leaders' meeting with their official business advisory group to tell a bunch of high-powered chief executives that he meant business.

But despite the heavy emphasis on bilateral trade deals in the smoke-filled rooms of plush Santiago hotels, trade did not make it on to the leaders' opening day agenda.

Terrorism once again dominated. Mr Bush said he intended to wind up pressure on Iran and North Korea to kill their nuclear weapons programmes and send outgoing US Secretary of State Colin Powell to the Middle East to get peace talks moving between Israel and the Palestinians.

Today the leaders' attention turns to trade. With a China free trade deal virtually tucked under her arm,
Helen Clark must be tempted to crow. She is too disciplined for that.

But New Zealand's proposed model deal with the world's most populous country will win attention from leaders who have stitched up substandard agreements simply to stay in the dance.

Unions and the Green Party have voiced fears jobs will disappear if New Zealand and China enter a free trade deal.

Helen Clark and Hu Jintao have released a joint feasibility study, which concluded that a deal would benefit both countries.

The benefits of the deal - negotiations for which start next month - would rise to as much as $400 million a year for New Zealand and would be the most significant deal since Closer Economic Relations with Australia.

But Council of Trade Unions president Ross Wilson said yesterday that the study did nothing to allay union concerns about job losses and relocation of some of New Zealand's 300,000 manufacturing jobs to China.

At a recent business meeting in Auckland to discuss the proposed deal, he said one New Zealand firm based in China boasted the wage bill for its 22 expatriate staff was the same as the total wage bill for its 2500 Chinese workers.

"It is this attitude that is of extreme concern to unions," he said. "The Government should not just talk up the gains and talk down the losses."

But Helen Clark said there might be a slower phase-out of tariffs in sensitive sectors, which include the textile, clothing, footwear and whiteware industries.

Greens co-leader Rod Donald accused the Prime Minister of selling out the human rights principles she used to champion in order to sell more milk to China.

"The announcement at Apec ... completes the transformation of Helen Clark from a campaigner against oppression in China into a marketing agent for Fonterra."

But Helen Clark said a feature of the study was its references to sustainable development, the International Labour Organisation, and workplace health and safety.

"This is considered a breakthrough and we are satisfied that we are likely to get specific outcomes relating to these areas."

The Engineers Union is calling for a nationwide summit of all interested parties before the deal is negotiated.

The prospect of a deal with China was the biggest topic of concern at its annual conference in July, and yesterday it called for a summit of workers, manufacturers and policy-makers.

- additional reporting Kevin Taylor and Audrey Young