Hon Dr Lockwood Smith MP National Party Foreign Affairs and Trade Spokesman

11 February 2004

Attempt To Cover Up NZ's Failure In Trade Talks

"Michael Cullen's either lost the plot or he's starting to believe his own spin as he attempts to cover up the Labour Government's failure to initiate free trade negotiations with the US," according to National Party Foreign Affairs and Trade Spokesman, Lockwood Smith.

He's responding to comments from the Finance Minister yesterday that 'the biggest worry for New Zealand (from the Australia/US FTA) was if the deal represented the US's maximum ambitions for the World Trade Organisation's Doha Round of trade liberalisation talks.'

"Anyone who knows anything about international trade negotiations knows that the main target for the US is to achieve liberalisation through the multilateral process, " Dr Smith says.

"That's precisely why negotiations on the Free Trade Agreement of the Americas have proved so difficult. Brazil and others want big progress on agriculture, while the United States wants that to be a multilateral development through the WTO," Dr Smith says.

"It's clear Dr Cullen is simply trying to cover his government's failure to initiate negotiations with the United States. Helen Clark's bungling of foreign affairs issues has meant New Zealand is extremely unlikely to enter into negotiations with the United States this year.

"What Dr Cullen either doesn't understand or chooses to ignore is the longer term dynamic effect of the Australian/US agreement. Free access to the high value US market for 97% of Australia's manufactured goods and two thirds of its agricultural products, not to mention free access to the almost $300 billion government procurement market, will all tend to suck potential investment from New Zealand towards Australia.

"But it is the strengthening political, trade, investment, business and cultural links between Australia and the US, bringing their economies progressively closer together - while at the same time reducing Australia's interest in the New Zealand economy and CER - that will do the most damage.

"If New Zealand doesn't get into negotiations, our most important trading partner will see us becoming increasingly irrelevant to their future. The widening gap will simply see more skilled New Zealanders move across the Tasman taking their investments and their families with them," says Dr Smith.

Ends

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