[asia-apec 1589] NZ Herald -

[notoapec at clear.net.nz]

NZ Herald
21/09/00 - 
Editorial:
 Keep knocking on the American door 
						

New Zealand needs no urging to forge a closer trade arrangement with North America. If the recently established North American Free Trade Agreement was opened to a wider membership tomorrow, New Zealand would be one of the first to knock on the door. In fact, the free trade deal we are making with Singapore is just one dimension of the much more ambitious "P5" plan of the previous Government that would have brought the United States, Chile and Australia into the fold.

Interest in a trade pact with the Americas has not diminished with the change of government. In March, at the end of a visit to Chile, the Prime Minister was confident she had rekindled Chilean interest in a "P3" with New Zealand and Singapore. The US and, oddly enough, Australia are proving harder to entice. Australia, which already has a free trade agreement with New Zealand, possibly prefers to initiate these things itself. And the US has had some presidential distractions over the past year or two.

But protectionist sentiment waxes and wanes in American politics. That should not obscure the attractions that closer trading ties with North America hold for this country. It is not just a big, prosperous market with an appetite for much the same food that we produce, it is the sort of market that could help New Zealand diversify its economy. The advantages of language, education and costs could entice more North American investment in the products of knowledge and new technology.

It is a matter of patience and keeping all possibilities open. After Nafta, the US Congress withdrew the authority of the Clinton Administration to make further trade treaties. The failure to launch a new global trade round at Seattle last year was another setback. Yesterday's Senate vote, which merely granted China the right to trade with the US on the same terms as almost all other countries, came as a relief in the present climate. It opens the way for China's admission to the World Trade Organisation.

But the tide will turn in the United States before long. Both leading candidates in the presidential election, especially Vice-President Gore, believe in the value of free trade. There is reason to hope that once a new administration has settled into office next year, it will gain the confidence of the Congress for free-trade initiatives and will be open to consideration of treaties with Latin America and Australasia.

There are those who see the world dividing into three powerful trading blocs - Europe, Asia and the Americas. While that prospect goes against the grain of global free-trading objectives laid down by the WTO and reflected in the guiding principles of Apec and the proposed NZ-Singapore agreement, it is a possibility no country can ignore. For New Zealand, it means that our Asian thrust must not blind us to the possibility that, if one day we are driven to choose, our trading interests might be more heavily weighted to the US.

For the moment, happily, there is no need to choose one hemisphere over another, and no certainty that the powerful nodes of international trade are going to square off into mutually antagonistic blocs. The European Union, formed 40 years ago in an era of protection, maintains common barriers to trade with the rest of the world, but more recent regional trade pacts, such as Apec, are aimed at mutually reducing barriers to all.

The US, an enthusiastic member of Apec, may be attracted to closer trade arrangements with Australasia as an extra strand in its ties with East Asia. The NZ-Singapore pact is an important foot in the door of South-east Asia, where there are trade talks that could exclude the rest of Apec. Whatever might attract North American interest to a closer trading arrangement with this part of the world, there is no question of its value to us.

Distance is not the difficulty it once was to closer trading partnerships. Singapore is as far from Auckland as Los Angeles. As we pursue ever better trading arrangements far to the north-west, we should not neglect the other side of the Pacific. There lies the world's largest, richest and most competitive economy. To become a small part of it would be a blessing to beat all trading partnerships.
----------------------------------

storyID: 152154
fromname: GATT Watchdog
frommessage: 
submit.x: 33
submit.y: 11