KEY POINTS:
The Apec summit in Lima provided a welcome opportunity for both New Zealand and John Key, its new Prime Minister, to make their case on an important stage. It did not disappoint. A country too small to warrant a place in G20 meetings and the like was able
to voice its concerns about the way nations like it were being buffeted by the global financial crisis. In turn, it was able to learn of the expectations and intentions of major drivers of the word economy. Mr Key, for his part, was able to make a mark among the leaders of the Asia-Pacific region, building on the momentum created by the Labour Government. A welcome bipartisan gesture by the outgoing Prime Minister Helen Clark saw Mr Key briefed for 45 minutes by one who had been there, done that and held New Zealand's head high in her time.
The new Prime Minister announced his own presence in an apt manner by using his credentials as an internationally experienced merchant banker. Mr Key was also able to draw upon tidings that could spell especially good news for this country. The financial crisis has concentrated minds, especially in reinforcing the notion that creating further trade barriers would push the world closer to a 1930s-style depression, rather than improve matters.
Perhaps most significantly, this galvanised Apec members to build on work begun by the G20 aimed at finalising the long-running Doha Round of world trade talks. The spur is substantial, given that the economies of Apec's 21 members account for half the world's trade. A best-case scenario suggests the members of the World Trade Organisation could conclude a global deal as early as the middle of next year.
Of course, such optimism has proved ill-founded in the past. But the economic turmoil has produced a new urgency. There is also an increased recognition that emerging countries must be given more say. If a global deal could be sealed, it would deliver the ultimate benefit to New Zealand exporters. But the meeting in Peru also brought a breakthrough in this country's second priority, the P4 Pacific-rim free-trade partnership with Chile, Singapore and Brunei, now known as Transpac.
In September, the United States, seeing the chance to enhance its strategic positioning in the region, gave the deal a major fillip by announcing its intention to join. This represents the back door to a free-trade pact with the US. In Lima, Australia and Peru echoed America's wish. Vietnam has also previously expressed interest. From modest beginnings, Transpac has now established the foundation for a wider Asia-Pacific free-trade agreement. Other Apec nations will be invited to decide whether to join by March, when negotiations for an expanded agreement will start. Throughout its near 20-year history, Apec has contemplated a Free Trade Area of the Asia-Pacific pact. Much to New Zealand's frustration, it has failed to move far. Transpac has the making of the necessary building block.
Experience with the WTO confirms the forging of a wider agreement will not be easy. Added membership brings added complexity. But the Lima summit at least diminished some of the concern about the US taking a more protectionist approach under the incoming Obama administration. American Trade Representative Susan Schwab said the Democrats had "articulated an interest in high-quality trade agreements. They have articulated an interest in trade relations with Latin America and the Asia-Pacific region."
That suggests the US, like other nations, is keen to seize all avenues to stimulate economic activity. It is to New Zealand's advantage that trade figures so largely. This is the silver lining to the global crisis and Mr Key and his Trade Minister, Tim Groser, a highly experienced trade negotiator, must make as much of it as possible. The Apec summit provided a successful start.
