KEY POINTS:
Throughout the world, celebrations of the EU's 50th Anniversary are in train. Those of us who have been in the front line of fighting for reform of the EU's agriculture policies and access for New Zealand exports might be excused for having mixed feelings.
Decades ago there was
an annual dinner of economists and agriculture leaders in Wellington at which we would flippantly toast the absent guest of honour, Charles de Gaulle, for keeping Britain out of the EC and giving New Zealand breathing space to develop alternative markets.
Politically, there can be no such ambiguity about the EU. Its political legacy is hugely positive.
The EU, formed to prevent yet another suicidal war between the great tribes of Europe, two of which had developed into world wars, has brought peace, stability and democracy to the continent.
After the fall of the Berlin Wall and the socialist ideology underpinning it, more European countries have joined. Each can expect over time to get closer to the political and economic living standards of so-called "old Europe" - France, Italy, Germany and others. This will be a great blessing to them and a blessing to all of us.
As well, world peace is indivisible and deep regional instability spills over well beyond its regional boundaries.
But until the late 1980s EU integration rested largely on a deeply suspect system of agriculture subsidies - the CAP, or Common Agriculture Policy.
More than 70 per cent of the EC budget was for agriculture subsidies and the fights that caused dominated every European heads-of-government meeting.
Older New Zealanders may recall British Prime Minister Margaret Thatcher waving her handbag at her exquisitely sophisticated Continental counterparts, demanding: "I want my money back".
When I was New Zealand's chief negotiator, European negotiators would tell me,"We cannot reform the EC's common agriculture policy - it is the glue that keeps Europe together".
They were right, not wrong. But in the past 15 years the situation has changed radically and for the better and Europe is far more than a suspect system of agriculture subsidies. The EU has launched initiatives of breathtaking vision - the formation of a unified currency, the creation of a single economic space, and huge expansion of its membership.
If the CAP was the glue that kept the EU experiment together until the late 1980s, these bonds will cement Europe in the future.
Reform of the common agriculture policy is now a continuing process. Agriculture spending as a proportion of the EU budget has fallen from above 70 per cent to below 40 per cent. In a parallel process of reform, in the World Trade Organisation, the argument we have between us is about the speed, not direction, of further reform.
Unfortunately, that international reform track - the Doha Round - may be stalled. We will know by the end of July whether it will go ahead - essentially, not until the next US administration is in place.
Meanwhile, all countries with an interest in protecting their trading relationships are ensuring they have booked a place on the lifeboats. For New Zealand, this means looking at every possibility for securing the best possible formal framework for economic relationships with as many of our major trading partners as we can.
The EU, the largest single entity in world trade, is doing the same.
But there is a need for fresh thinking on some of the strategic issues. It would be easier for Europe to develop a model trading framework with New Zealand than with any other country. The sophisticated issues in such a framework would include intellectual property, government procurement, individual sectors where there are sector-specific regulatory issues such as wine, technical barriers to trade, a multitude of services sectors, mutual recognition agreements, investment, and - in particular - developing a realistic model on trade and environmental goods and services.
The question then would be how to deal with European sensitivities on agriculture.
Given the direction of reform in Europe this is no longer unmanageable, but a high degree of realism on New Zealand's part would be required.
Even a casual understanding of the political realities rules out complete liberalisation. Naivety is the province of amateurs in the world of agriculture trade negotiations.
But there is no case for excluding anything on the grounds of "sensitivity". New Zealand has a long and successful history of pragmatic agriculture negotiations with the EU. This started long before the Uruguay Round with neverending negotiations on sheepmeat and butter.
That history of pragmatism can be built on. It is of great importance that we have what professional negotiators call a modality (a negotiating tool) already in the toolbox that is ideally suited for such a delicate negotiation - country-specific tariff quotas. We could find our way through even the most sensitive negotiations provided realism moderates our long-term vision.
We in New Zealand should certainly celebrate the great achievement of the EU's first 50 years. Over the last quarter of the 20th century, our economic relationship with the EU has been managed with difficulty but successfully. At the beginning of the 21st century, I believe there is another way to move forward with confidence.
* Tim Groser is National's trade spokesman and former chairman of the WTO's agricultural trade negotiations
