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Key free-trade deal deadline missed

NZ Herald, Auckland

Key free-trade deal deadline missed

2 November 2004

By JAMES GRUBEL in Canberra

Australia and the United States have missed a key deadline for their free trade agreement but Australian Trade Minister Mark Vaile remains confident the deal will start as planned on January 1.

The two allies needed to exchange letters confirming the agreement by October 31 to meet the 60-day notice period before the deal could start on New Year’s Day.

But the exchange of letters was delayed by final checking by both countries to ensure enabling laws were consistent with the agreement.

A spokesman for Vaile said the 60-day notice period could be shortened.

"We continue to be confident that the agreement will come into force as scheduled on the first of January," he said.

"But the 60-day notice period will be shortened by mutual agreement, once we have the exchange of letters. We need a bit more time to get that done."

The Australian Parliament and US Congress have passed laws to enforce the agreement.

Bilateral trade between Australia and the US is worth about A$41 billion ($44.7 billion) a year, with the trade balance favouring the US.

Last year, Australia imported A$27 billion worth of goods from the US and exported about A$14 billion worth of beef, lamb, crude oil and cars.

An Australian Government-commissioned study found the trade deal with the US could add A$6.1 billion a year to the economy after 10 years.

Vaile also said he was optimistic Australia could secure free trade deals with China and with the 10-member Association of South East Asian Nations (Asean). He said talks on a trade deal with Asean would start next year and could be concluded by 2007. "I have no question in my mind it will work smoothly," Vaile told the Australian newspaper.

Australian Prime Minister John Howard and New Zealand counterpart Helen Clark have been invited to this month’s Asean summit in Laos, where stronger regional links will be high on the agenda.

Canberra and Beijing began talks on a free-trade agreement after Chinese President Hu Jintao’s visit to Australia last year.

Australia already has free trade agreements with Singapore and Thailand, as well as New Zealand.