Glimpse of big gains for NZ on horizon

By John Armstrong and Warren Gamble

Apec trade ministers have glossed over their differences regarding tariff cuts by shunting the sensitive subject off to world trade talks, thus avoiding another credibility-eroding scrap.

An afternoon retreat at the exclusive Gulf Harbour Country Club ended with ministers putting on a show of unity by reaching a broad consensus on what should be discussed at the world talks later this year.

They agreed to support industrial products being included on the World Trade Organisation agenda, widening the negotiations from simply agriculture and services.

The deal avoided any detail over which range of goods and services should be given priority when the talks begin in Seattle in November.

But more bickering over how fast to cut tariffs would have further crippled the regional trade grouping's credibility following the feuding at last year's summit in Kuala Lumpur.

Getting industrial products on the agenda at the WTO could have a big payoff for New Zealand in the long term. Other countries - particularly the Europeans - would find it easier to trade off cuts in agricultural barriers in return for lower tariffs on their manufactured exports.

Under WTO rules fishing and forestry are classed as industrial goods, providing a potentially huge boost through more open access for New Zealand exports. However, any tariff reductions are likely to still be years off.

The Minister for International Trade, Lockwood Smith - who is chairing this week's trade ministers meeting in Auckland - described the consensus as a global breakthrough.

Although Apec's voice has now been added to calls for a wide-ranging WTO round, the G8 grouping of world industrial powers, including Apec members Japan and the United States, had already reached that position.

Despite that, Dr Smith pronounced Apec had moved a big step forward. Australian Deputy Prime Minister Tim Fischer echoed the mood, saying the meeting had got off to a flying start.

Another plus was that the ministers had agreed the coming WTO round should be completed within three years. However, the time limit may be optimistic given that the last world trade negotiations took nearly twice that period.

The meeting also agreed to send the final six of 15 sectors identified in an Apec initiative for early tariff reductions on to the WTO.

Dr Smith's buoyancy followed earlier signs that the two-day meeting might have become bogged down over reluctance by individual member countries to move on specific tariff cuts ahead of the Seattle meeting.

Analysts will have to wait until the release of the meeting's communique today to judge whether Dr Smith's enthusiasm at his postretreat news conference matches the feelings of other countries.