NZ wins key US backing on trade

By FRAN O'SULLIVAN, assistant editor

The Government's campaign for a free-trade deal with the United States has made a breakthrough by winning support from a key US figure.

US Trade Representative Bob Zoellick's backing came three days after the Government agreed to send a frigate to the Middle East to help in the US "war against terror".

Mr Zoellick said the integration of the Australian and New Zealand economies meant an agreement with New Zealand would complement the deal the Bush Administration is now discussing with Canberra.

"We will be soliciting the views of Congress on this matter as we move forward with the Australian free-trade agreement," he said in a letter notifying Congress of the Australian talks.

Prime Minister Helen Clark yesterday conceded that her decision to send weapons inspectors to Iraq and frigates to the Persian Gulf and play an active role in the war against terrorism had played a significant role in US thinking.

"There's never been a suggestion that, 'Unless you do this, we don't do that'," she said.

But New Zealand had been "a good friend and a strong supporter in the international campaign against terrorism" in the past 14 months.

"Probably this has led to some revision of the thinking about New Zealand."

She said she also placed considerable weight on the "lateral" proposal New Zealand had tabled at the World Trade Organisation to cut industrial tariffs, which matched Mr Zoellick's trade liberalisation strategy.

"If we are talking of chess, that move had impact," she said.

National and Act effectively claimed the Government had bought its breakthrough by committing military support to the United States this week.

"Three days later, and lo and behold, the US Administration announces it plans to approach Congress for its opinion on the merits of a free-trade agreement with New Zealand," National trade spokesman Lockwood Smith said.

Act leader Richard Prebble said it was "a black day" for New Zealand, and the failure to open negotiations simultaneously with Australia would harm the economy.

Helen Clark says her opponents have "read it completely wrong".

"[It] is a very good outcome after a long period of representations."

She said that while New Zealand's anti-nuclear stance was likely to be a factor - "as it has been at every meeting with a New Zealand minister or officials for the last 17 years" - it was "not a deal-breaker".

Asked if New Zealand would be prepared to review its nuclear stance, she said: "No, we haven't considered any re-examination."

Critical to the US softening is the warm personal relationship between Helen Clark and Australian Prime Minister John Howard.

In Canberra yesterday, Mr Howard said the two countries had different trading interests in seeking deals with the US.

"But we will to the maximum extent possible tick-tack with New Zealand and keep New Zealand informed and do what we can consistent with our own objectives to assist New Zealand."

Underlying the diplomatic breakthrough is an intense eight-week lobbying campaign in Washington. headed by New Zealand ambassador John Wood.

Lobbying firm Griffin Johnson has conducted a "surgical lobbying" campaign with the Bush Administration, senior US politicians and key business figures, and the United States New Zealand Council has created a free-trade business coalition to push New Zealand's case.

Last night, Helen Clark pledged New Zealand's campaign would be intensified.

"The green light for the Australian negotiation has given us an amazing opportunity to present our case in an even more high-profile way than before.

"We've already attracted useful amounts of support in Congress. I think we can now build on that."