Thais put NZ trade on the front burner

By AUDREY YOUNG in BANGKOK

New Zealand will negotiate a free trade agreement with Thailand, a buoyant Helen Clark announced yesterday, after meeting Thailand Prime Minister Thaksin Shinawatra shortly before the Apec leaders' summit began in Bangkok.

Dr Thaksin wanted the deal ready for signing before the Apec meeting in Chile next year.

A deal with Thailand has been in the wind for some months but the speed with which the Thais want it completed took New Zealand by surprise - especially given that the trade balance is heavily in Thailand's favour.

"The Thais are as keen as mustard," Helen Clark said.

New Zealand exports $350 million of goods to Thailand, mainly dairy products, and imports about $560 million of goods, mainly cars and computer goods.

"We are obviously going to be beneficiaries of lowering the tariff barriers here [Thailand] and raising the profile of New Zealand in the Thai market."

It will be New Zealand's fourth major trade deal after the Closer Economic Relations treaty with Australia and the recent Closer Economic Partnership with Singapore.

New Zealand is also in the midst of negotiating a trilateral trade deal with Singapore and Chile known as the P3 (Pacific 3). A study is also being undertaken on a free trade agreement with Mexico.

Thailand has concluded a trade deal with Australia and will begin one with the United States, too.

Before the Apec summit, Helen Clark expressed concern about the proliferation of bilateral and regional agreements distracting from reviving the World Trade Organisation's multilateral Doha Development Agenda and trade negotiators suffering fatigue.

Some of those concerns evaporated yesterday. "We are not going to admit to any fatigue factor," she said. "The concern we've had is that there have been agreements negotiated that are sub-optimal in terms of where you want the WTO to go."

She did not believe that would be the case with Thailand. It would be a quality agreement.

When the summit ends today, the leaders' declaration is expected to address the growth of bilateral and regional deals between and among Apec countries - by saying that such agreements should be compliant with World Trade Organisation standards.

New Zealand had pushed for the setting of standards, said Helen Clark "so it's not just a case of anything goes."

The leaders are also expected to give strong support to the reactivation of the Doha talks which collapsed in Mexico last month.

The leaders are expected to agree to a declaration that elevates the issues of security to "complement" trade concerns within Apec.

The complementary role will deliver US President George W Bush what he wanted.

But the caveat most other leaders want is that such issues must be linked to an economic agenda to warrant the attention of Apec.