Fran O'Sullivan:US should treat Australia and New Zealand together

COMMENT

Prime Minister Helen Clark is back on the front foot promoting a proposal for a free-trade deal with the United States.

Proposals for such a deal effectively stalled in April when Clark suggested that the Iraq war would not have happened if the Democrats' Al Gore had been elected president instead of Republican George Bush, a gaffe that cost her a humiliating apology to Bush.

But that was then - and this is today - as the PM might usefully say. Relations between US powerbrokers and Australia's Mark Latham are looking distinctly frosty after the Labor leader said he would bring his country's troops home by Christmas if he won the forthcoming election.

Compared to this Clark's sins are paling. And she may just have found a useful circuit-breaker to bring the US to the table.

Clark's rationale - which has not been spelled out directly - goes something like this.

With New Zealand and Australia now rapidly making moves to formalise a single market across the Tasman, it makes sense for the US to do a deal with the single market partners.

After all, the US is negotiating with the Southeast Asian bloc Asean. Why not do a deal between the US and the CER partners, Australia and New Zealand?

This stratagem would enable New Zealand to take part in a trilateral deal between the US and Australia without the larger player having to climb down off its pedestal and do a direct deal with New Zealand. There is logic to such a stratagem.

And being Clark - also some clever politics.

She used her fleeting trip to Sydney last week to suggest the time was ripe to capitalise on the proposed FTA between Australia and the US - any agreement should eventually be trilateral, she told the Australian newspaper.

Across the Tasman Latham is a serious contender for Australian Prime Minister John Howard's crown. But whereas Latham is holding out on committing his party to legislation on the Australia-US FTA, Clark told Sydney news media that Australia had negotiated the best agreement it could.

She also played down fears that the deal would lead to a rise in the cost of pharmaceuticals - an issue in Australia and likely also to be one here if New Zealand gets to the negotiating table.

It is Australian Labor that is currently giving the US angst - not New Zealand Labour.

The PM indicated in her recent address to the NZ Institute for International Affairs that the deal was still a priority for her Government. However she noted the difficulties of getting negotiations launched in a presidential election year.

The waters will be tested again next week when New Zealand and US officials get together in Washington for talks on the Trade and Investment Facilitation Agreement (TIFA) between the two countries.

Trade Negotiations Minister Jim Sutton hinted this year that the US might use the TIFA discussions to give some private pointers on ways an FTA might ultimately be moved forward - at least to ensure that New Zealand gets in the US Trade Representative's queue.

These talks were last held in 2002.

The other issue that must give Clark cause for a wry smile is the outburst by US Deputy Secretary of State Richard Armitage who broke diplomatic rules by saying that Australian Labor - at its senior levels - was split on bringing the troops home by Christmas.

Armitage's outburst is serious.

By blowing the whistle on the misgivings that some senior ALP members have about Latham's rather tetchy relationship with the US he also undermined his informants' trust.

Clark might well say, "Where's your apology, Richard?"