WASHINGTON - Here in Observatory Circle, cab drivers have never heard of New Zealand, while our embassy's formidable neighbour Britain - one of the "coalition of the willing" after all - is seriously famous.

It is also mercifully close to the start of this green and silent private road, closed to civilian traffic and home of mainly diplomatic residences, embassies and former US presidents.

Here on embassy row the world changes pace. People speak carefully. Things are done in a certain way. It is not necessarily a better way, but administered with better manners.

Although the embassy was aware we were arriving from New York at 11.30, we are told we're too early for the scheduled lunch with the ambassador and instructed to wait in the large sitting room with its unpredictable art collection. There's Nigel Brown's painting On Sunday driving, a Pat Hanly numbered print, a Maori cloak, a sheep in a wool vest. Pottery, most of it unlabled, includes a fine rowboat-shaped porcelain piece by Raewyn Atkinson.

Then there are the photos of former ambassadors who have reached this key diplomatic posting which stretch back to Sir Walter Nash during the Second World War (1942-1944) and end at the man we've come to visit. John Wood, with his fashionable small beard, has had two stints as ambassador to Washington. First for the four years before Jim Bolger's appointment, then again after the former Prime Minister left in 2002.

Although many were surprised when the gruff trade expert who came up through Foreign Affairs was reappointed, others insist he is an able diplomat. On the other hand, and to be fair largely because of Helen Clark's policy on Iraq, he has been spectacularly unsuccessful in achieving the Labour Government's stated priority when he was appointed: To secure a free trade deal with America for New Zealand.

Suddenly we're summoned. Again we troop next door to the Residence where this time our knock is answered.

There stands an Asian manservant preceded by two enthusiastic labradors. They're bred by the ambassador's wife, Rose.

The ambassador and his wife wait flanked by their staff of five.

The room is graceful and lovely, with elegant chairs, comfortable sofas, low tables and French doors opening out on to a terrace overlooking a grove of trees.

The Woods entertain here "heaps" from small informal lunches like this to bigger, grander, more formal business affairs. Instructed by the ambassador, they run through their responsibilities.

Second Secretary, Greg Skelton, looks after foreign policy (Pacific, Africa, the Americas); US domestic policy (which included Bush's re-election last November); human rights; environment issues, climate change and Antarctica.

"And did you expect the Bush victory?" I ask.

"We said it was too close to call, though someone did actually drag it out on a graph that Bush would eventually come through."

"And how do you deal with the fact that the US refuses to sign the Kyoto Protocol?"

By putting their international stance "to one side" and working on the rest, says Skelton. A bilateral arrangement consisting of scientists getting together and working on projects to mitigate climate change in the Pacific offsets the international clash. "That's been very successful."

Jeff McAlister, First Secretary political, covers the flip-side of foreign policy, including the Middle East, Asia and Europe. He also looks after security policy, "that is non-proliferation, disarmament, military issues" in co-ordination with NZ defence staff in the US.

Key issues include the rise of China and whether it will position itself to rival the US; Bush's determination to see separate Palestinian and Israeli states living peacefully side by side by the end of his second term; Iran and its nuclear possibilities.

Ian Hill, deputy chief of mission, whose main role is supporting the ambassador, helps keep Wellington informed, "basically managing the work of the rest of the team to make sure they [Wellington] know what the US views are on things political, climate change and Apec - and we're working together to underline those common interests".

Andrea Smith, Counsellor (Trade and Economic), assisted by Charlotte Beaglehole, Second Secretary (Trade), heads the trade and economic section of the embassy. "We're doing a lot of work on the free trade agreement with New Zealand, looking at day-to-day trade policy issues with the US, bilateral access issues and monitoring US trade initiatives round the world. We're also working with the US to ensure the Doha [free trade] Round is successful," says Smith.

It is our long-anticipated free trade deal with the US which Wood was sent here to secure, that occupies much of his energy too. Nowhere is it more clear than here in Washington that New Zealand's relationship with the US is complicated. Although we did not send troops to the war in Iraq, the ambassador reminds me that we are "far and away the most major [contributor] for a country of our size, to the attempt to stabilise the situation in Afghanistan".

Despite that, New Zealand's decision to not join the "coalition of the willing" has not helped our case for the kind of free trade agreement achieved by Australia. This has made the ambassador's task difficult.

As he says, "New Zealand is a small country lacking economic critical mass - and with very large ambitions in terms of the relationship with the United States ... you have to try a lot harder. You're essentially competing, in this town, for the attention of the US."

So far Ambassador Wood's efforts have had dismal results. "We're a little bit like the duck on top of the pond ... working very hard to consolidate our congressional support," he says, going on to explain how, without that support, we cannot even get into negotiations.

Wood's post-election strategy has two prongs. First, at political level, to formally launch a New Zealand caucus within the US congress in a bid to persuade the administration that congressional support will be there - if we're allowed to get into negotiations.

As he points out, it is urgent for the system here to acknowledge where New Zealand stands, so that we are not disadvantaged economically by the Australian/US agreement which came into force last month - something neither the US nor Australia intended.

Second, on the trade side, Wood is delighted that the president of the US Chamber of Commerce, Tom Donaghue, formally "advocated" for New Zealand at the Apec conference in Santiago.

"It's our job to put together the bulk of the corporate world who support our case," he says. "With the US/New Zealand council we've got over 370 major corporations, many of them in the Fortune 500, advocating for us getting into negotiations."

The Australian deal is already disadvantaging us financially. As former National Trade Minister (1996-99), and National MP for Rodney, Lockwood Smith points out, Australian beef farmers are getting between 6 and 7 cents a kilo more for their beef than New Zealand farmers. In two years' time, he notes, they will be able to send 20,000 more tonnes into the US at zero tariffs while New Zealand is still paying 4.4USc.

However, the influential United States' National Association of Manufacturers Trade Agenda for 2005 includes a recommendation that America pursue a free trade deal with New Zealand - along with India, Egypt, Malaysia and South Korea.

So can the ambassador pull off what is surely one of the toughest tasks around? In true diplomatic style, he puts it to one side and focuses instead on the United Nations-led Doha agreement.

On Doha, which is focussed on lowering trade barriers worldwide, he is upbeat: "With the strong leadership, and intention to be flexible on the part of the US as well as the other nations, there's no reason we can't get the job done by the end of 2005."

He and Rose work hard. Over the "last little while" they have entertained many delegations and groups, travelled to visit US-based companies such as FedEx, EDS, Pizza Hutt International and Dell Computers who have a big presence in New Zealand, while the ambassador has called on 50 to 60 members of congress lobbying support for the Australia/US Free Trade agreement.

"Is that working hard enough?"

It is after 2pm. Ambassador Wood moves out on to the terrace for a photo and points out neighbours, Bill and Hillary Clinton's house. "We're very well positioned here. There's the Vice President out front."

And how does he get on with George Bush? "The President is very personable, very frank and direct, expresses himself in straightforward terms," says Wood.

The ambassador's wife twirls her finger in a circle, indicating to the man handing around food to do another circuit. And then, subtly and politely as they do things around here, there's a secret signal it is time to depart. The ambassador's staff make for their coats, there's another round of handshakes and we're off.