17 March 2002
The Washington based Institute for International Economics have released a report indicating there are strong economic,
political and trade reasons for the early launch of a free trade agreement between the United States and New Zealand.
Alistair Polson, President of Federated Farmers has welcomed the report with cautious optimism. "While FTA negotiations
are unlikely to commence this year it is reassuring to see the myth dispelled that this agreement would only benefit New
Zealand."
"The US would gain strategic benefits from an FTA including: the acceleration of trade liberalisation; contributing to
free and open trade in the APEC region and reducing the risk of polarisation between competing blocs in East Asia and
the Americas.
"An FTA would open up a wide range of business and investment opportunities for New Zealand and contribute to
international trade liberalisation. New Zealand exports to the US are projected to increase by US$732 million (50%)
under a US-NZ FTA or 49% under a trilateral FTA including Australia.
"The effect on the US dairy industry has long been touted as a reason for not going ahead with an FTA. The Institute
makes it clear that US dairy production would only decline by 0.5%. In reality the US market is so large the impact of
New Zealand products will be minimal.
Fred Bergsten, co-author of the report and one of the United States' most respected trade economists, hails the
cleanness, openness and comprehensiveness of CER as an example of a successful economic model which should be used as a
lead for a comprehensive FTA with the US for others to follow. "The Prime Minister must advance this model in
discussions with US President Bush on her forthcoming visit to Washington," said Mr Polson.
ENDS