Cablegate: New Zealand Trade Minister Touts Fta to American

This record is a partial extract of the original cable. The full text of the original cable is not available.

040356Z Nov 05

UNCLAS WELLINGTON 000861

SIPDIS

STATE FOR EAP/ANP/RICCI AND EB/TPP/ABT
USDA FOR FAS/ITP/CLAUS AND MIRELES, FAS/BIG/WILLIAMS AND
FAS/FAA/YOUNG

E.O. 12958: N/A
TAGS: ETRD EAGR ECON NZ
SUBJECT: NEW ZEALAND TRADE MINISTER TOUTS FTA TO AMERICAN
FARM BUREAU

1. Summary: In a meeting with visiting American Farm Bureau
Federation representatives, New Zealand Minister of Trade
Phil Goff pitched his country's case for free-trade
negotiations with the United States. Goff asserted that a
free-trade agreement would benefit both countries and that
U.S. agriculture should not fear increased competition
resulting from such an agreement, because of New Zealand
agriculture's relatively small size. The Farm Bureau's
president, Bob Stallman, responded by noting that the bureau
was not a big fan of bilateral free-trade agreements in
general and placed top priority on successful agriculture
negotiations in the Doha Round. End summary.

2. In the November 2 meeting, Minister Goff twice raised New
Zealand,s interest in negotiating a free-trade agreement
(FTA) with the United States. It would benefit both
countries and increase the value of U.S. exports to New
Zealand by 25 percent, he said. Referring to U.S.
agriculture's possible reluctance to support FTA
negotiations, Goff suggested that New Zealand agriculture --
because of its relatively small size -- did not pose a threat
to U.S. farms. For example, he pointed to New Zealand,s
dairy industry, which has a lower production level than that
in California or Wisconsin. Goff also noted that due to New
Zealand,s economic integration with Australia under the
Closer Economic Relations agreement, the U.S.-Australia FTA
created inequality and trade-diversion issues for New Zealand.

3. Stallman reacted cautiously toward Goff,s push for
free-trade talks. He noted that successful agriculture
negotiations in the WTO Doha Round were the Farm Bureau's top
priority and that the bureau in general did not support
bilateral FTAs unless they benefited U.S. agriculture. He
added that time was running out for New Zealand to get on the
U.S. negotiations list before Trade Promotion Authority
expires in 2007.

4. Goff stated that New Zealand's trade policy was focused on
achieving liberalization in the WTO, while simultaneously
negotiating bilateral agreements. He noted that New Zealand
welcomed the U.S. proposal on agriculture subsidies for the
Doha Round, while "disappointment" was "too light" a word to
express how New Zealand felt about the European Union's
response.

5. Goff remarked that he had been part of the Labour
government that implemented New Zealand,s economic reforms
of the mid-1980s. He stated that before those market-opening
reforms, New Zealand's regulatory regime and subsidy programs
resembled those in a protectionist Eastern European country.
Although the reforms initially caused hardship, they greatly
benefited New Zealand agriculture. He challenged Stallman to
find a New Zealand farmer who wanted to "return to the good
old days."

6. The seven-member delegation of the American Farm Bureau
Federation was visiting New Zealand from November 1 to 4. The
delegation included Stallman, the bureau's president; five
state bureau presidents; and, one staff member. The Farm
Bureau delegation also met with officials from the Ministry
of Foreign Affairs and Trade and the Ministry of Agriculture
and Forestry.

7. In addition, the delegation met with officials from
Federated Farmers, a body representing New Zealand farmers,
similar to the Farm Bureau. The New Zealand officials
discussed such issues as the growing rural-urban divide in
New Zealand and the need to emphasize to the country's
politicians and public the importance of agriculture to the
economy. They noted how New Zealand's farmers had benefited
in the long term from the removal of support mechanisms,
after approximately five years of painful readjustment. The
officials stated that New Zealand farmers are now
market-oriented, exporting high-quality products. They
pointed out that, in the case of lamb, higher volumes are
produced from a much smaller national flock.
Burnett

© Scoop Media