Black Day for New Zealand

ACT leader Richard Prebble said today's announcement that Australia and the USA are about to start talks on a free trade deal that excludes NZ, represents the most significant foreign affairs trade policy failure. It's a black day for New Zealand.

"Successive New Zealand governments have identified a free trade agreement with the United States as the ultimate trade agreement and the possibility of Australia which is our number one trade competitor obtaining a free trade agreement that excludes this country has been devastating.

"Australia has been outperforming New Zealand economically for the last 30 years which has lead to hundreds of thousands of New Zealanders migrating, to Australia's gain and New Zealand's loss.

"All economic commentators agree that a free trade agreement with the US will accelerate Australia's relative economic performance.

"It is misleading, however, for commentators to welcome the Australia/US free trade agreement on the basis that some economic modelling shows New Zealand will indirectly benefit from the agreement. Any increased trade benefits will be more than wiped out by the damaging effects of the widening gap between New Zealand and Australia's standard of living. A wealthier Australia will take more trade from New Zealand but it will also be a magnet for talented New Zealanders. New Zealand firms will have to transfer to Australia to take advantage of the free trade agreement.

"Both the old parties must accept some responsibility for this debacle. National, because it refused to lead on the issue and explain to the nation the economic consequences of our suspended ANZUS membership. The Labour government must take even more of the blame because it has refused to acknowledge the existence of the Bush doctrine. President Bush and his Republican administration have made it abundantly clear that they will assess their relationships with nations on the basis of those countries' responses to America's requests.

"Prime Minister John Howard has made it quite clear to the Australian Parliament and people that Australia's staunch support of USA is based in part on a hard headed assessment of Australia's best interests.

"I believe that statements by Prime Minister Helen Clark that it doesn't matter who is at the starting gate when the free trade talks begin but who is at the finishing line, are wishful thinking. Our government should be upfront and tell the country we are not even in the race, our trade negotiators have been bluntly told by American officials that we are near the end of the queue.

Our parliament should acknowledge the seriousness of the situation and the need for a bipartisan multiparty initiative to restore our relationships with the United States. This is something we know we could do easily, so we could be at the finishing line with the ultimate trade prize - a free trade agreement with the United States, something that would enable the economy to grow to lift dramatically the standard of living of every New Zealander," Mr Prebble said.

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