[asia-apec 1735] NZ Herald Online Story - Australia accused of export foul play

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Senders email: notoapec at clear.net.nzMessage: From NZ Herald, Auckland, Feb 26 2000

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											26/02/01 - Australia accused of export foul play 
													By VERNON SMALL deputy political editor

The Government fears Australia is using its close security relationship with the United States to stitch up a free-trade deal which could leave New Zealand out in the cold.

New Zealand has been pushing for a free-trade agreement with the US, Singapore, Chile and Australia. Former President Bill Clinton made positive noises during his visit here for the 1999 Apec meeting, although there has been little progress from the US since then.

But now the Australian Government is seeking a one-on-one deal with the US and could be "playing the security card" to steal a march on New Zealand, according to advice Foreign Affairs officials gave Prime Minister Helen Clark before her talks yesterday with her Australian counterpart, John Howard.

New Zealand effectively pulled out of the three-way Anzus security pact by passing anti-nuclear laws in 1987. The US has since declared Anzus inoperative.

But September 1 sees the 50th anniversary of the pact, and officials fear Australia will use the occasion to seek preferential access to the giant US economy.

They are concerned that the Australian approach will let security issues spill over into trade - something once feared as a US retaliation to withdrawal from Anzus, but long since discounted.

That could seriously reduce New Zealand's chances of striking a deal with the potential to deliver billions of dollars in economic rewards.

However, officials hope the US will view Australia and New Zealand as a single trading bloc linked by the closer economic relations pact, and will be less enthusiastic about a bilateral deal.

But New Zealand is taking no chances, pressing Australia for a joint approach to the US.

Mr Howard said he had not discussed a review of Anzus during two hours of talks with Helen Clark in Auckland yesterday.

He said they discussed free trade and trade deals with the US as well as their common view on the need for a new round of talks through the World Trade Organisation.

"As far as a bilateral agreement between Australia and the United States is concerned, we are obviously prepared to see whether progress can be made towards that. 

"I think it is important not to unduly raise expectations, because there is no gain to Australia in such an arrangement unless there is significant give by the United States on critical issues."

He said New Zealand would be kept fully informed of those discussions.

Helen Clark said any trade agreement with the US must include agriculture. Australia and New Zealand had taken cases to the WTO claiming US protectionism, which was a major barrier to an accord.

She said New Zealand still hoped for a free trade agreement encompassing three, four or five nations.

It was not clear what priority President George W. Bush's Administration would give to bilateral agreements, or to Asia-Pacific deals versus Latin America, she said.

"So at the moment the approaches are best described as exploratory."

Mr Howard sent the ritual negative signals about New Zealand's level of defence spending, but stopped short of outright criticism, saying: "What New Zealand decides to do is a matter for New Zealand."

However, he noted that Australia had set out a White Paper increasing its own defence spending.

Helen Clark stressed the Coalition's plans for "substantial" expenditure on defence, starting with re-equipping the Army.

"There is a lot to be done. New Zealand is not looking at cutting its defence spending. If anything it is likely to increase."

She is understood to have told Mr Howard scheduled defence spending would deliver "depth not breadth" to New Zealand's capability.
											
											
 

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