Landmark free-trade treaty with Singapore to go ahead

By JOHN ARMSTRONG political editor

New Zealand's landmark free-trade deal with Singapore will be signed by the two countries' prime ministers next week after Parliament yesterday ratified the agreement by 89 votes to 30.

Labour, National and United combined to provide majority backing for the closer economic partnership treaty in the face of opposition from the Alliance, the Greens, Act and NZ First.

The deal will be rubber-stamped by the cabinet next Monday after the Alliance agreed to abide by the result of yesterday's vote in Parliament.

The Coalition partner strongly opposed the deal on the grounds that it lacked national interest, employment, foreign investment and environmental safeguards.

Helen Clark will sign the treaty in Singapore next Tuesday en route to Brunei, the venue for this year's Apec summit.

While firmly in favour of free trade, Act voted against the motion because of the "bogus" and "deeply racist" clause inserted into the agreement giving more favourable treatment to Maori to meet Treaty of Waitangi obligations.

The free-trade agreement looked in jeopardy in September after National suggested it might vote against the deal because it made special allowance for Maori.

A slanging match erupted between Labour and National, with Labour accusing the Opposition of hypocrisy since the same words were used in previous trade deals drafted while National was in Government.

National yesterday claimed belated victory in the spat, saying Ministry of Foreign Affairs papers it had since obtained showed that the clause was not there purely to meet treaty obligations.

Its meaning had been broadened to ensure that affirmative action programmes under the Labour-Alliance "Closing the Gaps" programme were exempted from the agreement.

Both National and Labour agreed yesterday that the free-trade deal was vital as a "bridge" to Asia because of lack of progress in multilateral trade liberalisation through the World Trade Organisation.

Finance Minister Michael Cullen said New Zealand was perhaps the only developed country at some risk of being shut out of the increasing "circles" of regional trade agreements.

The Singapore treaty was a crucial gesture that New Zealand wanted to be part of such agreements.

Dr Cullen and National's Jenny Shipley cited the prospect of similar negotiations with Chile, whose President, Ricardo Lagos, is paying a brief visit to Auckland on his way to Apec.

The closer economic partnership deal establishes a free-trade area with Singapore that covers goods, services, investment and technical barriers to the trade in goods.

It eliminates tariffs, prohibits export subsidies on goods, including agricultural products, and expands services commitments. The agreement comes into effect on January 1.