O'Sullivan: PM to talk tough with Bush

By FRAN O'SULLIVAN

Prime Minister Helen Clark has left United States interests in no doubt of her motivation to secure a free-trade agreement between New Zealand and the US.

Clark leaves for Washington tonight to meet President George Bush and powerful members of his Administration.

But she made time late on Friday evening to address an influential gathering of the Asia Pacific Council of the American Chamber of Commerce on the importance of trade liberalisation and her Government's commitment to securing multilateral and bilateral agreements.

She left no doubt she would put the case to Bush for a New Zealand deal - and not shy away from engagement.

Clark's presentation has been strongly endorsed by council chairman Tom Pinansky, who says New Zealand's case makes sense, as does Australia's.

Such a move would strengthen the New Zealand economy - which has substantial investment by US companies - and be good for business.

Pinansky was honoured that the Prime Minister and former Prime Minister Jim Bolger gave time to address the conference and dine with council members. Such moves are a significant part of an informal agenda to warm relations between New Zealand and the US after the long standoff on defence, which began in the 1980s.

If New Zealand can secure the active support of the US Chambers of Commerce - the world's biggest and most influential business organisation - the chances of securing a free-trade agreement will be enhanced.

Trade and investment between the two countries has a considerable impact on the New Zealand economy as the US is New Zealand's second-largest trading partner.

Trade totals more than $9 billion and US companies operating here have investments of more than US$12.6 billion ($28.67 billion), providing jobs for thousands of New Zealanders.

But Pinansky notes that for New Zealand and the US to get serious about prospective negotiations, Bush will first have to be in a position to deal.

That requires him to have trade promotion authority - the approval for the President to negotiate trade deals which is still wending its way through the US Legislature.

Listening attentively in the audience to Clark's speech was Charles Swindells, the US Ambassador to New Zealand who will be present in Washington for the Prime Minister's pivotal meetings, and a host of well-connected New Zealand business people.

Swindells is working to warm the relationship between the two countries and has proposed several actions, such as resuming visits by the US Coastguard, as first steps to get things back on a normal footing.

The dinner was the finale to the Towards Free Trade conference which Amcham New Zealand executive director Mike Hearn organised to coincide with the council's regional meeting. It was the first time the council had met in New Zealand for some years - our distance from major regional centres is a factor here.

But the conference had an immediate focus.

Bush's decision to impose a 30 per cent tariff on steel imports upset some council members who were having to combat concern - particularly in South Korea - about the impact of the tariff on regional economies.

Their prime focus was to keep the free-trade motor running.

The importance of market liberalisation to increasing global wealth and security was a recurring theme.

Held at the stylish Hilton Hotel on Princes Wharf - a venue which impressed the overseas contingent - the conference may have canvassed some predictable themes, but there were some stellar performances.

Bolger's breakfast speech was particularly focused.

He may have shed a considerable amount of weight during his three years in Washington, but what Bolger has lost in physical presence he has more than made up with the polish acquired from his time in the world's most powerful capital.

Putting the argument for a free-trade agreement onto a higher level than mere trade numbers, Bolger said New Zealand stood alongside the United States "as we face two of the great battles of the 21st century: the battle to eradicate terrorism and the battle to eliminate poverty through liberalising trade".

Bolger traversed the arguments for a US deal with New Zealand - powerfully put in a report by Fred Bergsten, director of the Washington-based Institute for International Economics - and the catalytic effect such a deal would have on further liberalisation in APEC and at the WTO.

He also talked up Clark's visit with Bush.

"Positive results from that meeting would send a powerful signal that post-September 11 the US was not only committed to lead a worldwide coalition against terrorism, but was equally determined to lead the world in lowering barriers to trade and by so doing make a major contribution to achieving the goal of a fairer and safer world."

His statesman-like speech had more than one New Zealand attendee observing it was a pity that Bolger wasn't leading the National Party now instead of its near-invisible leader.

But Jesus Estanislao, the former Secretary of Finance in the Philippines, warned that the principles of nation building, with their focus on competitive advantage, would have to be somehow married with regional co-operation if trade liberalisation was to proceed without internal conflict.

In December, the Creating Coalitions of Interest conference brought together a range of players: Government ministers, senior mandarins from the Ministry of Foreign Affairs and Trade and business people alongside two influential US players, Myron Brilliant, vice-president Asia from the US Chamber of Commerce, and Fred Benson, president of the United States-New Zealand Council.

A consensus was built that the free-trade agreement was a prize worth combining the respective forces of the public and private sector to achieve. It laid the groundwork for the formation of the NZ-US Council and the delegation led by Fonterra chief executive Craig Norgate which will be present in Washington this week.

Last Friday's APCAC meeting has positioned New Zealand's campaign with the influential Asia-Pacific members of Amcham.

At their subsequent council meeting on Saturday, they made securing trade promotion authority the high priority. Its importance goes much further than prospective deals with Australia and New Zealand, and a raft of other countries queuing for Bush's attention.

It is central to the creation of the proposed Free Trade Area of the Americas, and for the US to play its part in the Doha round of negotiations at the World Trade Organisation.

Trade promotion authority gives the President the ability to forge trade deals with other countries which can only be voted up or down - not amended - by the US Legislature.

Legislation giving the President this authority scraped through at Congress level by just one vote before Christmas, but it still needs Senate approval.

Pinansky said the authority would be the focus for his council's annual "door-knock" in Washington in May. Representatives from American Chambers of Commerce from throughout the Asia-Pacific region will lobby members of Congress stressing the importance for US international business of markets liberalisation.

Amcham New Zealand's Mike Hearn plans to take a delegation to join the Washington door-knock.