US toughens trade stand

By AUDREY YOUNG POLITICAL EDITOR

The US embassy in Wellington yesterday gave the clearest indication yet that the door has been firmly closed on New Zealand's hopes of free trade talks.

It also said security issues had an important bearing on trade negotiations, despite the New Zealand claim that security and trade have been treated separately.

The statement, a rare move for the embassy, came after controversy erupted over remarks published in yesterday's Herald by a US Government spokesman.

He said Prime Minister Helen Clark's comments on Iraq had delivered a "coup de grace" to NZ hopes for free-trade talks.

Asked if she was disturbed by the criticism, Helen Clark said: "I have to dismiss those suggestions out of hand, as indeed one can infer from the statement from the embassy today.

"These things are never about one single matter and I think with respect to anonymous comments, we'll just be turning the other cheek.

"I am not prepared to have anonymous comments stand in the way of a good relationship with a country with as long a friendship with New Zealand as the United States."

She viewed the embassy statement as supporting her stand.

But it is also the clearest indication yet that non-trade issues such as New Zealand's position on Iraq were key factors in the decision.





The statement said the United States took a wide range of factors into account when it was when examining the merits of potential free trade agreements.

"These factors include trade, political, security and other elements of the bilateral relationship," it said.

"Contrary to recent suggestions in the press here, US decisions on free trade agreements are not based solely on any one factor."

The embassy made it clear that New Zealand should not hold hopes of a change of mind in the near future.

"The United States is not prepared to enter into FTA negotiations with New Zealand at this time," it said bluntly, "though we have not ruled out the possibility of an FTA with New Zealand at some point in the future."

Some have interpreted that as saying that the United States is keeping the door open on an agreement, but it is more startling for its frankness in ruling it out.

It is more strongly worded than the bombshell of US Trade Representative Robert Zoellick, who said in Washington this week that "there's been some things done recently that would make a [free trade agreement] harder to carry" to the US Congress.

It is understood the embassy statement was blunter because the New Zealand Government, including Trade Minister Jim Sutton, was continuing to speak as though a free trade agreement was still a possibility.

The US spokesman quoted in the Herald, who made it clear he was speaking for the Government, said:

"You can forgive friends a lot, but in the way the world really operates, personal attacks are beyond the call, particularly from friends."

Asked if she accepted even a portion of the blame for New Zealand being bypassed, Helen Clark said:

"Everybody knows that New Zealand was not on the verge of entering negotiations for an FTA.

"Australia has only just begun. New Zealand was well behind that and the opportunity is there for us to keep continuing to build our case."

She said the United States embassy and New Zealand's understanding were entirely consistent.

"There has never been a commitment to enter negotiations. It is something we've talked about from time to time.

"We continue to have aspirations, and we'll continue to make our case in Washington as we were encouraged to do by Ambassador Zoellick quite a time back."