Sutton sees hope of WTO talks

By BRIAN FALLOW

WELLINGTON - Trade Minister Jim Sutton sees Thursday's "surprisingly decisive" vote by the United States House of Representatives to give permanent normal trade relations to China as the most hopeful sign yet that a new World Trade Organisation round can be put back on track.

Plans for a new round of multilateral trade negotiations were spectacularly derailed in Seattle last December after a standoff between anti-free-trade protesters and riot police.

Mr Sutton said a meeting of Apec trade ministers in Darwin on June 6 and 7 would discuss how to rebuild momentum for a new WTO round.

"I can't point to a lot of progress since Seattle, but the positive vote in Congress, in effect for China to join the WTO, clears the decks to some extent," said Mr Sutton.

"Having got the first item on its trade agenda [this year] ticked off, the US Administration will be able to turn its attention to getting a new WTO round under way."

The Darwin meeting would be an opportunity for New Zealand to discuss initiatives such as the closer economic partnership (as it is now diplomatic to call free trade agreements) which New Zealand and Singapore are negotiating, and a wider link-up of CER and the Asean Free Trade Area (Afta), which is in a preliminary study phase.

"It will be an opportunity to reassure other Apec economies that they are compatible with Apec principles and respect the Bogor timeframes," said Mr Sutton.

One of Apec's central principles is that trade agreements should be open, in the sense of not creating new barriers against third countries.

The Bogor agreement committed Apec's developed economies to eliminate their tariffs by 2010 and its developing members to abolish theirs by 2020.

"If we are thwarted, or progress is unattainable, on the broad front we should make progress wherever we can," said Mr Sutton. "As long as we adhere to the architecture of the overall ambition of the WTO, we can construct the edifice room by room."

New Zealand and Singapore had embarked on their bilateral negotiations in part to act as a catalyst for a wider CER-Afta association.

"That is not to say it will happen in the immediate future. But Australia now seems to share New Zealand's view that this would be a constructive way to go.

"There is nothing like looking over your fence and seeing the moves your neighbours are making, which might give them an advantage, to get things moving again."

National's trade spokesman, Lockwood Smith, has said Mr Sutton will be in the embarrassing position in Darwin of having to report some backsliding in New Zealand's commitment to unilateral tariff reduction.

But Mr Sutton said that the New Zealand economy was already so open it had few cards left to play in terms of bilateral trade negotiations.

"We have decided the remaining cards will be played as prudently as possible."