The United States' top union leader Richard Trumka has cancelled a high-powered visit to New Zealand next February because of the "ongoing labour dispute" between the Key Government and the Council of Trade Unions.

The president of the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO) decided to cancel his trip at the request of CTU president Helen Kelly who claimed the Government would use the Trumka visit to "parade him about and pretend they were union friendly" at the very time it was removing the rights of unions to freely access NZ workplaces.

Business Herald inquiries disclose the CTU is also planning a major campaign against the Government's proposed reforms including nationwide strike action.

Trumka's decision to "indefinitely postpone" his trip is a slap in the face to the National Government which invited him here as part of its campaign to build powerful allies in Washington for the Trans-Pacific Partnership (TPP) negotiations.

Trumka, who took over the leadership of the AFL-CIO late last year, is a close confidante of US President Barack Obama and is seen as a progressive moderate in Washington circles.

Trade Minister Tim Groser told the Business Herald "it was unfortunate" that the Trumka visit had been canned as a result of CTU's decision to play domestic politics in the international arena. "That's their choice but it's not in New Zealand's national interest," said Groser.

He believed the "very moderate labour reforms introduced here" probably fall well within the framework of US laws.

Groser also noted he had taken "three leftwingers" - Kelly, Opposition Leader Phil Goff and Labour's trade spokeswoman Maryan Street - with him to visit Trumka in Washington DC last October at the time of the US-NZ Partnership forum.

But Goff, a former Labour trade minister, maintained it was in fact he and Kelly who had opened the AFL-CIO's doors for Groser. "We worked quite hard to get him [Trumka] out to New Zealand as we felt it would be quite helpful for the TPP ... I'm really sorry that Key has burnt them off."

Goff affirmed that Labour would continue to support the TPP.

But Kelly revealed the CTU had withdrawn its support for the TPP negotiations and was now revising its stance on free trade agreements.

"We have not opposed trade agreements per se," said Kelly. "But have instead tried to influence their content."

While the CTU had been unhappy with many of the agreements to date, it had supported the previous Labour Government's focus on ensuring labour clauses were included in FTAs.

"Now it appears the Government is taking away work rights meaning that our international competitiveness is based on less job security and fewer work rights," said Kelly.