Fran O'Sullivan: Who can deliver the goods on trade?

Despite the plethora of visiting world leaders, free trade talks and general hoopla about the PM's personal ambitions on the international stage, New Zealand has fallen increasingly behind big neighbour Australia when it comes to ensuring our "place in the world".

Helen Clark is in the process of making her third Cabinet.

Gossip suggests Phil Goff will hold on to his plum role as Foreign Affairs Minister and Jim Sutton will retain Trade Negotiations.

The duo has established strong international linkages in the six years they have held their portfolios.

Goff is well-plugged into a network of long-serving foreign ministers including Australia's inimitable Alexander Downer, who has been in that role since 1996.

Sutton has similarly acquired seniority within a global network of influential trade ministers - partially through length of service but also because he (assisted by able trade diplomats such as Crawford Falconer, Charles Finny and formerly Tim Groser) has been able to parlay New Zealand's reputation as a reliable "free trader" into gaining access to exclusive forums like the "Five Party Plus" talks taking place in Geneva as a precursor to the World Trade Organisation's December ministerial meeting in Hong Kong.

This is all useful stuff, but on the big test - getting trade deals done that ensure New Zealand exporters and businesses do not fall further behind their Australian counterparts - the pair can be found lacking.

One key reason is that Clark does not empower her ministers sufficiently to just get on with the job. They are also too lily-livered to stand up to her when she pulls rank and gets in the way.

The other key reason is that the two ministers do not delegate sufficiently to senior Ministry of Foreign Affairs and Trade officials. The officials should be tasked appropriately to drive negotiations along without endlessly having to resort to second-guessing Clark and her apparatchiks on the Beehive's ninth floor.

MFAT officials know - as do other senior government officials - that in Helengrad poorly telegraphed moves are career limiting. But a tendency towards over-control is leading to political stasis.

Getting some acceleration requires Clark to bring more senior players into the foreign affairs and trade ambit and appoint special champions from outside.

The top priorities are:

Getting back into bed with Uncle Sam?

New Zealand is at a frank disadvantage because we do not have a free trade deal with the US - unlike our next door neighbour. Clark has led the charge - periodically. But subsequent forays by Sutton and Goff have so far gone nowhere.

Five years ago, Clark - intent on prime ministerial trophy hunting - said a US FTA was a "high priority". NZ wanted to be one of the "first cabs off the rank" with the Bush Administration. But we're still not even in the queue.

Any number of excuses have been mounted: Washington's focus on agreements with broader benefits and Clark's ill-timed comments about the Iraq War are just some.

Just a month back, US Trade Representative Rob Portman said the Administration was now "looking at the possibility" of opening negotiations with Malaysia, South Korea, Switzerland and Egypt. NZ's absence from Portman's list - after years of joint private/government campaigning - is devastating.

The US has already either chalked up agreements or opened talks with a raft of other countries.

Clark must confirm her Government is prepared to hold frank talks on the future of the US bilateral relationship now the election is out of the way. Departing Ambassador Charles Swindells telegraphed that the US wants to move: bury the 20-year-old Anzus/nuclear divide and establish a new comprehensive bilateral framework which could cover security, trade and economic ties and cultural relationships.

But while Goff signalled Labour might entertain talks, any subsequent discussions over the "modalities" will not occur until the Foreign Minister is confirmed in his portfolio and the new US ambassador arrives. It is unlikely that anything substantive will occur until early 2006. Goff's apparent "anti-Americanism" during the campaign is a negative factor.

So too, the difficulty of getting Washington's attention when other nations are also seeking formal discussions over their own relationships.

There is another issue clouding FTA prospects: Bush's Trade Promotion Authority will expire in mid-2007, leaving a very narrow window for any resultant negotiations to be completed.

Clark needs to appoint a new champion with sufficient clout in Washington to strengthen bilateral ties and get a free trade deal done.

She must go to someone like Mike Moore and either appoint him as Washington ambassador or a special envoy to get negotiations under way. The former WTO chief has been underemployed since he returned to New Zealand and is enough of a natural enthusiast to create the right waves.

In reality, there is nobody else - apart from former ambassador Jim Bolger - who has huge stature stateside.

Embracing the Dragon

New Zealand was first among the Western developed nations to open free trade talks with China. But already we are losing our negotiating advantage compared with Australia, which was much slower to kowtow to Beijing's demands.

Australia's Department of Foreign Affairs and Trade is much more open about the state of its own Chinese negotiations than MFAT. DFAT even runs a summary of each round on its website to keep business informed. New Zealand's China taskforce leader Charles Finny - who ran a good PR campaign on the deal - left for the private sector. His replacement David Walker is less open.

At Apec in 2004, Clark did not include Sutton and Goff among the lineup for talks with President Hu Jintao and his senior ministers despite their presence in Chile.

The sad reality is that New Zealand could have got the deal done by now if Sutton, in particular, could have persuaded Clark to overcome her instinctive caution much earlier on and open talks months earlier.

Sutton is overloaded with the critical WTO talks. Clark should bring Goff into play or appoint a special minister to drive the negotiations through to a conclusion.

Defending the Australian takeover

Finance Minister Michael Cullen has made a "single economic market" with Australia his baby. Technical agreements are under way on issues such as securities regulations.

But no real progress has been made on big-ticket items like tax. The IRD has warned New Zealand's corporate tax base is now at risk as many Australian companies invested here use legal loopholes to minimise tax.

Neither Cullen nor Clark herself has so far had the cojones to lay this issue on their counterparts.

Goff has lost advantage to Downer in dealing with our Pacific neighbourhood. Sutton has made no real progress on the apples issue, and, while the wine equalisation tax was offered in Australia's last Budget, it has yet to be introduced.

These are the areas where Clark's Government should make a stand. Tilting at windmills during the election on irrelevant issues such as New Zealand's anti-nuclear laws is not where the action is.