Doubts on US free trade deal
Southland Times, Invercargill (New Zealand)
Doubts on US free trade deal
By Dylan Thorne and Fairfax - Southland
10 November 2008
Free trade talks with the United States are likely to go on the back-burner as United States president-elect Barak Obama focuses on the global financial crisis, some southern business leaders believed.
The dairy industry is seen as the big winner from any free trade agreement but some say better trade access for New Zealand is less likely under a Democrat than a Republican leader.
Bright Wood general manager John Crane, who has US and New Zealand citizenship, said free trade talks would stall because the Obama administration would focus on its own economy. Any deal would have little impact on Bright Wood because there were no tariffs for the timber products it shipped to the US, he said.
"Americans are losing their jobs left and right and they will be demanding the government protect them from unfair competition," Mr Crane said.
That view was shared by Alliance chief executive Grant Cuff, who did not expect a trade deal to be ratified in the near future.
"New Zealand and the world have bigger issues than bilateral free trade agreements at the moment," he said.
In contrast, Meat and Wool New Zealand chairman Mike Petersen was optimistic the negotiations would progress.
"The Democrats are wanting to have a place in the world and they’re talking about trade but they also want to work labour and the environment into it ... I think New Zealand would be a perfect partner."
Two former Kiwis living in the US who have businesses there were also optimistic.
Boston-based Kiwi Craig Copland, a director of Telematics, an in-car communications company, and former Central Otago man Mark Mitchell, who owns a Los Angeles-based meat importing company, believed free trade was still on the agenda.
"Over the past eight years a lot more work was being done with the Republican group and I would say that will be carried on," Mr Mitchell said.
The US is New Zealand’s second-largest export market behind Australia, worth about $4 billion a year.
Imports from the US are the third-largest behind Australia and China and are also worth about $4 billion.
Any agreement is expected to be a major boost to New Zealand’s dairy industry, although the US dairy sector had objected even before talks get under way. New Zealand exported about $890 million of dairy products to the US in the year ended June 30.
In September, the US agreed to join the P4 group of Pacific Rim countries - Singapore, New Zealand, Chile and Brunei - to negotiate a trade deal, which Prime Minister Helen Clark said would add up to $1 billion a year to New Zealand’s economy. Negotiations are expected to start in March.
Fonterra spokesman Graeme McMillan said the company hoped the new administration would continue the progress that had been made.
