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NZ knows place in US trade game

Dominion Post, Wellington

NZ knows place in US trade game

By Haydon Dewes

26 April 2006

Delegates at the New Zealand-United States Partnership Forum in Washington are realistic about the tangible rewards of three days of meetings. They are few, if any.

For some, the book on Washington handed out at the closing session was the sum total.

But there was a belief that analysts would look back at the forum, which comprised a small but powerful lineup from both sides of the Pacific, and identify it as the event that helped New Zealand get a free- trade agreement with the United States.

The gathering produced some odd bedfellows: Labour stood side by side with National and unionists dined with big business executives. Rounding out the troupe were government department heads and academics.

The New Zealand contingent dubbed its united front NZ Inc - all were keen to stir up interest in New Zealand and its economic benefits.

The latest developments are another chapter in a protracted standoff with the world’s superpower.

More than 20 years after New Zealand’s nuclear-free legislation was passed it is still a divisive topic. Privately, some US officials still talk of it as a snub that destroyed a close friendship. Some say it remains an obstacle to renewing the bond.

That New Zealand was pressing for a free-trade agreement while refusing even to discuss the nuclear ban was seen as extraordinary.

What the US will make of Trade and Defence Minister Phil Goff’s urging of closer military and economic ties is hard to gauge. It was Mr Goff who just six months ago called National leader Don Brash a US lapdog who would axe the nuclear legislation for a free-trade agreement.

Now that Mr Goff has made his overtures, the Government will wait and see what moves the US makes.

The Assistant Secretary of State for East Asia and the Pacific, Christopher Hill, was careful not to tread on any toes while the latest developments were played out.

He insisted New Zealand was not being punished for its stance and has steered clear of differentiating between an ally, such as Australia, and a friend, which New Zealand is. Allies have official military ties and trade deals.

Instead, Mr Hill focused on the present relationship and sounded out ideas for the immediate future. He praised New Zealand’s role in the Pacific. As if on cue, trouble flared in the Solomon Islands while Mr Goff was in Washington.

Mr Hill was also warm on the idea of more economic cooperation, which he said could lead to a free-trade agreement, but would not commit to anything.

Which is why dozens of high-powered New Zealanders went to Washington to convince American businesses and politicians that there was merit in freeing up trade.

The reality is that New Zealand struggles even to get on the radar in Washington.

Mr Goff made much of securing a meeting with Defence Secretary Donald Rumsfeld, but so, too, that day did Tunisia’s defence minister.

Dr Brash saw the reality of New Zealand’s standing during his own meetings. Though there was definite warmth toward New Zealand, it was clear it was a bit player on the world map.

Mr Goff admitted that being heard is never easy when you are a small country of limited strategic importance. The US is negotiating free-trade agreements with Korea and Malaysia - its seventh and 10th-biggest trading partners. New Zealand is 43rd.

Though a free-trade agreement seems to be a mirage on the horizon, it can at least still be seen.

"New Zealand is a small economy, but we do add value and it is on the basis of adding that value that we put our case," Mr Goff said.