NZ hopes Obama will sign on to trade deal
Dominion Post, Wellington
NZ hopes Obama will sign on to trade deal
By James Weir
6 November 2008
New Zealand’s free trade talks with the United States should still be on the agenda early next year, even though president-elect Barack Obama is less of a trade liberal than John McCain.
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 around $4 billion.
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.
For New Zealand, the dairy industry - Fonterra - is seen as the big winner from any free trade agreement, though the US dairy industry has objected even before talks get underway. New Zealand exported about $890 million worth of dairy products to the US in the year ending June 30.
US Republican presidential candidate John McCain was publicly in favour of a free trade deal with New Zealand though Democrat Mr Obama was not expected to oppose it.
Wellington Chamber of Commerce chief executive Charles Finny said Mr McCain was, on paper, more liberal on trade policy. But Mr Obama’s advisers had said his past public comments on the impact of free trade deals did not mean he would be "as difficult as that suggested".
"We would hope president Obama would continue the momentum begun by the Bush administration," Mr Finny said.
Negotiations were still expected to start in March.
One positive impact of Mr Obama’s election on a free trade deal is that the Democrats control Congress which would make it easier for a Democratic president to get authority to negotiate a trade deal and pass legislation.
"So there are real positives - we should not interpret this as a negative for our trade agenda," Mr Finny said.
Business Roundtable executive director Roger Kerr said there had been an improvement in trade relations with the US in recent years. The US had "fewer friends" around the world than it used to, so president-elect Obama was expected to want to fix that.
"We can hope New Zealand’s relations will be on a continuing path of improvement." Mr Kerr said the P4 agreement would not necessarily be set back because of an Obama administration.
The US financial crisis has worsened since the agreement on P4 trade talks was first announced, with the US sharemarket down a thundering 18 per cent in October alone and massive bank bailouts by the US Government.
Some fear it might now focus on its own economy and put trade deals on the back burner.
Manager of advocacy and manufacturing at the Employers and Manufacturers Association (Northern) Bruce Goldsworthy said there was general agreement that better trade access for New Zealand was less likely under a Democrat than a Republican leader.
At recent international trade meetings, US representatives said there could be a delay of up to two years on trade deals while they "sorted out their own domestic economy", Mr Goldsworthy said.
"With a change in US administration I think it will be softly, softly [on trade deals] and I don’t think exporters are expecting anything different," he said.
But Mr Finny said he hoped there would not be a slowdown on trade deals.
"We learnt from the 1930s the appropriate response to problems is not to look inwards," he said.
Establishing links with the new Obama administration would be "one of the highest priorities" for a new government in New Zealand, Mr Finny said.
