Chinese Premier sets two-year target for NZ trade talks

Chinese Premier Wen Jiabao said in Wellington today that he hopes to conclude trade talks with New Zealand within two years.

He revealed the negotiations had hit problems over agriculture and the service industries but was still confident of hitting the deadline.

A mix of protesters and supporters greeted Mr Wen when he arrived at Parliament for today's talks.

Around 50 flag-waving Chinese cheered for Mr Wen alongside an equal number of Falun Gong supporters who chanted that their movement was good. Green MPs also protested and held a Tibetan flag aloft on Parliament's forecourt to show their opposition to China's occupation of Tibet.

Helen Clark met Mr Wen on the steps of Parliament and ushered him to the Cabinet meeting room. They later said the trade discussions had been moved up a level and that it was hoped New Zealand would still be the first Western country to sign a free trade deal with China.

"Bilateral FTA negotiations have entered into a crucial stage and have encountered some difficulties for instance in the agricultural and service areas," Mr Wen said.

"These are not insurmountable difficulties... they might be a blessing in disguise."

After the talks today the two countries leaders witnessed the signing of four treaties covering legal assistance, education, trade in deer products and cultural exchanges.

Helen Clark said New Zealand would participate in the 2010 World Expo in Shanghai and Mr Wen announced his approval for Fonterra to take a 43 per cent share of Chinese dairy company San Lu.

Both leaders pledged wider and greater co-operation across a range of areas including an undertaking to hold annual bilateral meetings

Mr Wen said if both countries acted with mutual trust, accommodation and understanding the problems would be overcome. Mr Wen said the trade talks were "trailblazing".

"The two governments are also going to pay greater attention and support to the process," Mr Wen said.

"The future agreement will be comprehensive, of high quality, balanced, and serving the interests of both parties and acceptable to both sides."

- NZPA