Devil’s in the trading detail
New Zealand Herald
Devil’s in the trading detail
by Fran O’Sullivan
24 August 2005
The first member of President George W. Bush’s Cabinet to visit New Zealand has a positive message to take back to his Washington boss. Mike Johanns - appointed Agriculture Secretary earlier this year - was impressed by just how "New Zealand, to the person that I’ve talked to, is pro-trade".
On his two-day sojourn, he visited farms and talked trade with businessmen, officials, and, politicians.
He was impressed at how, 20 years after New Zealand "literally eliminated" agricultural subsidies and programmes, "absolutely no one is arguing we should go back to that system".
"They view their role as one of being able to compete in an international marketplace."
Johanns has been softening-up US farmers to get them onside with the President’s plan to axe agricultural subsidies if officials can forge a multilateral trade deal giving them greater access to semi-protected markets such as Europe.
US farmers still have considerable protection through their own Farm Bill subsidies, which will continue to 2012 if a new bill goes into negotiations.
But Bush made clear at the recent G8 summit that all forms of US agricultural protectionism - export and domestic subsidies as well as tariff anomalies - would be wiped if the US could get major movement in the World Trade Organisation’s Doha Round. The round has been stalled since the failed Cancun meeting in 2003.
Much of Johanns’ discussion here has been geared to devising strategies for an agricultural breakthrough.
Yesterday, Prime Minister Helen Clark took time out from electioneering to brief Johanns on New Zealand’s long-standing case for a bilateral free-trade deal with the US. Their joint "standup" interview - which took place before their luncheon talks - was telling.
Clark - buoyed by her success in over-trumpeting National’s Don Brash in their first face-to-face television debate - repeatedly jumped in and even answered for Johanns when he was asked by reporters how close he would describe the bilateral relationship.
Clark: "This is a trick question [laughter] because former Secretary of State Colin Powell in Washington very kindly described New Zealand as a very, very, very good friend."
Johanns - a less hyperbolic personality - replied New Zealand was a "good friend".
But Clark had also made clear that she would not miss an opportunity to talk about the proposed deal. "I think it is good that the Secretary will go away hearing from us on our home ground."
He later told the Herald that he had said to the Prime Minister that "there aren’t any current plans" in terms of a free-trade agreement.
"But on the other hand we are open, I listened very intently and I think there were some from the trade community who also made the case.
"Part of my reason for being here is to be a good listener - and so that’s exactly what I do."
Johanns was not perturbed by the latent anti-Americanism Labour has stirred up during the election campaign.
One business player who tried to engage Johanns on Labour’s decision to make anti-nuclear hysteria a campaign selling point later related that the Secretary brushed it off like a "seasoned pro".
Johanns told me the US had "never linked" the trade agreement with nuclear.
"I know that some have argued that. But quite honestly, we look at each trade opportunity independently and try to make an assessment from an economic standpoint whether we commit the time and resources to negotiating, getting an agreement and then the resources to get it passed. Because we have to take that action too."
Asked directly about a suggestion by former US Ambassador Charles Swindells that New Zealand and the US needed to have a "conversation" to move on from the nuclear standoff, Johanns replied 99 per cent of his conversations here had been about trade issues.
"I was really brought here by the Agriculture Minister ... that’s a great question for Condoleezza Rice."
Johanns acknowledged that if New Zealand was to get on the United States’ free-trade agreement queue it would have to move quickly.
The President’s Trade Promotion Authority - the mechanism that allows him to negotiate bilateral deals as well as WTO agreements - will expire in July 2007.
"Conventional wisdom says without that it’s very difficult to get bilateral agreements approved."
But he did say that the Bush Administration had reached the point where it had to sit down and "make decisions about what we can get done in the period of time".
"I think every country in the world would argue that the United States really needs to be focused on the WTO and trying to bring about a successful agreement.
"So how do we fit in and how much can we fit in gets to be the issue - and there’ll be a point out there where a decision will be made and we’ll head out to do as much as we can."
There have been suggestions the Bush Administration is weighing a raft of potential free-trade options - one of which may be an Asia-Pacific deal with a small number of countries to bridge the Eastern and Western Hemispheres.
Johanns rejected suggestions that the US simply adopt a "cookie cutter" approach, adopting Australia’s US free-trade agreement and using it as a template for a New Zealand version. "I’ve never seen one [agreement] that was simple or a cookie cutter."
Other constraints could be imposed by the makeup of the Congress after next year’s elections.
The former Governor of Nebraska is clearly a Bushie. His direct conversational style is eerily like the President’s.
So too, his ability to get to the point.
His major focus - as is New Zealand’s - is to get movement before the WTO’s December ministerial meeting in Hong Kong.
At last weekend’s Quint meeting - an informal meeting of agriculture ministers from Australia, the US, Japan, Canada and the European Union - Johanns rehearsed his President’s arguments.
EU Commissioner for Agriculture Mariann Fischer Boel said later she was optimistic that a timetable could be found for phasing out all types of domestic subsidies.
But market access still remains a sticking point, and the hurdles are considerable.
"By December we need to get the stars aligned here," said Johanns.
"It would be way too optimistic to expect the fine detail of an agreement to be hammered out without some pretty significant work being done in advance of that meeting.
"The devil is in the detail ... we’ve got to get down to that level and start identifying what it means to grant market access ... got to get some flesh on the bones."
