Fran O'Sullivan: Key must state trade terms loud enough for Obama to hear

Come on John Key. Say what you really mean to say. And make sure you also say it directly to Barack Obama.

Our Prime Minister - with a bevy of other Asia Pacific leaders - will this weekend try to make more progress on the fledgling Trans Pacific Partnership trade deal (TPP) at the annual Apec leaders' meeting.

It is a great opportunity for Key to take a leadership role. But it is also important that he finishes his diplomatic mission as strongly as he started by continuing to make it clear that New Zealand will not ratify any such trade partnership deal that doesn't cut the mustard for our exporters.

And not become star-struck when he is in the company of more powerful leaders who talk bold but lack sufficient backbone to make the necessary domestic accommodations to get a high-quality result.

Right now it's Obama's feet that Key needs to hold to the fire to ensure the ultimate success of the fledgling trade deal.

The Japanese - who have yet to even enter negotiations to join up with founding partners New Zealand, Singapore, Brunei and Chile, and the United States, Australia, Vietnam, Peru and Malaysia - in what is heralded as an Asia-Pacific "path-finder" agreement - have been in the limelight.

But from this distance, the spectre of our own Prime Minister laying down "John's Law" to his Japanese hosts on just what the bottom line should be for joining the new Asia-Pacific free-trade agreement (as Herald political correspondent John Armstrong aptly wrote from Tokyo yesterday) is surreal.

Good on Key for holding true to the principles which underline a high-quality, comprehensive agreement ( jargon for an outcome where countries open their markets for trade in virtually all goods and services, and tariffs that "protect" local producers are phased out over time).

Taking a principled approach to international issues (combined with sufficient pragmatism to get a deal done) is deeply embedded in the New Zealand foreign policy mindset. It is an attribute which former Prime Minister Helen Clark drew on when her Government inked major free-trade deals, such as New Zealand's path-breaking bilateral agreement with China.

But it is obviously still a moot point whether, and at what pace, Japan will finally succumb to opening up its agriculture market. And wiping the punishing farm tariffs which put too many hurdles in the way of our own agricultural exporters to meet the condition that Key has set for Japan to join formal talks on the Trans Pacific Partnership trade agreement.

While Key was launching his pre-emptive strike, Prime Minister Naoto Kan was off at the G20 meeting in neighbouring Seoul with Obama, South Korean President Lee Myung-bak and other major power players from the Asia Pacific.

But right now it is Obama who is looking like the major free-trade recalcitrant in our neighbourhood. His inability to finally forge a "break-through" on the stalemated Korean-United States free-trade agreement (Korus) on the outskirts of the G2 meeting has underwhelmed not just US business interests but other influential players in the American policy establishment.

The deal - which has been waiting ratification since Obama became President - is seen as a cornerstone for the US thrust on trade in Asia.

It's a moot point whether other players will believe Obama does in fact have the cojones to get a TPP deal over the line if he can't even get the Korus knocked into shape so that he can take it back to Congress.

The reality is that if the TPP is to live up to its principles the US will also have to open its own agriculture markets, including dairy (which is important to New Zealand) and sugar (an important market to Australia which was excluded from its own bilateral American free-trade deal).

On the jobs front trade is an important part of the President's economic agenda.

But the New York Times yesterday highlighted a Pew poll that 44 per cent of Americans feel free-trade deals have been bad for the country, while only 35 per cent feel they have been beneficial.

This indicates that Obama has a considerable sales job ahead of him if he wants to unveil a TPP deal when he gets to play host to other Apec leaders in Hawaii next November.

For the TPP to fly, both the Congress and Senate must pass implementing legislation.

The key question is whether Obama - who has been chastened by the outcome of the recent mid-term elections - will spend some of his political capital championing an enlarged Asia-Pacific trade pact through the Republican-led Congress. Or simply let it lie on the table (like Korus) while he pursues re-election as President.

If John Key is doing his job this weekend he will persuade Obama the two aren't mutually exclusive.