KEY POINTS:
The United States' decision to begin negotiations to join New Zealand, Singapore, Chile and Brunei in the Trans-Pacific Partnership (P4) free-trade pact is akin to a marriage made in heaven, according to the Trade Minister, Phil Goff.
While it is difficult to imagine Washington regaling us with
such grandiloquence, there is, nonetheless, some justification for the minister's view. As he suggests, "the US gives the P4 the critical mass and momentum that we need and P4 gives the US the strategic positioning in the region that they badly need".
More than that, however, there is the prospect of tariff-free access to a large, prosperous market with much in common with New Zealand, not least its appetite for the food we produce. As with all free-trade negotiations, it will not, however, be plain sailing.
Mr Goff's confidence is predicated on strategic concerns. The US has studiously sought inclusion in a raft of trade agreements. It was miffed to be excluded from major Asia-Pacific trade initiatives, notably Asean Plus Three, which would link China, Japan and Korea with Southeast Asia and the East Asia Summit initiative.
Membership of the P4 would help remedy that, especially if other countries, such as Australia, Vietnam and Peru, joined subsequently, paving the way for the pact to become the main driver of trade liberalisation in the region. Conversely, however, such possibilities also add complexity to the P4 and open the door to potential US concerns about labour and environmental standards.
Mr Goff believes this strategic overview will hold, whether or not the Democrat candidate, Barack Obama, claims the White House on November 4. Maybe so but, equally, it could be subsumed by other considerations.
The chief worry is protectionist sentiment, which has tended to wax most strongly under Democrat Administrations. The farming lobby, particularly that representing dairying, will seek to undermine if not the whole venture then any agreement's value to New Zealand by pressuring the American negotiators to concede little.
US Trade Representative Susan Schwab has been keen to play down that prospect, saying the dairying sector had, over the past 10 to 20 years, become "increasingly sophisticated about its stake in more open trade".
But this was not apparent when Australia signed its free-trade agreement with the US in 2004. Few concessions were granted for dairy products. Already, it is clear that the US dairying lobby is preparing to return to the trenches.
But if dairy products are the major hurdle, they also represent the biggest opportunity. All possibilities should, therefore, be kept open. This is especially so because, if obstacles can be overcome, the adding of the US to an existing agreement could yield a better result than a simple bilateral deal, such as that struck by Australia.
The US already has similar bilateral agreements with Chile and Singapore and, while any P4 deal would be of particular advantage to New Zealand, it will see investment possibilities in a country of such linguistic and educational familiarity.
In that respect, the Overseas Investment Office's screening of investments over $100 million will be on the table. Likewise, American pharmaceutical companies will be keen to undermine the power of Pharmac, the Government's drug-buying agency.
Such complexities set the stage for intense negotiations and re-emphasise the stakes. But, having failed over many years to gain a bilateral deal with the US, this is a big opportunity for New Zealand. The American farming lobby has not proved influential enough to stop Washington signalling its intention to join the P4. Now, the most must be made of that breakthrough.