What we might do in trade if we have the initiative

A country deals better with the world if its people and its political parties agree what counts. That goes even for big countries, as the United States found in the 1960s. It especially goes for minnows.

So what was John Key up to sniping at Helen Clark while she was in Washington? It read like petty domestic politics when the imperative was strategic foreign policy.

Was this another example of Key sound-biting himself out of the gravitas he will need as Prime Minister? And thereby gifting Clark a campaigning weapon? Or did he have a point?

Set aside Clark’s claim of a “convention” that the opposition leader doesn’t criticise a Prime Minister’s conduct of foreign affairs while abroad. It is usual and sensible practice but there is no hard and fast unwritten law.

Then note that for 40 years from the mid-1960s Labour and National disagreed on foreign affairs and defence objectives and policies. Labour was more attuned to multilateral (United Nations) solutions and a peacekeeping army. National preferred kin-based military alliances and hardware to match.

National chafed at Labour’s anti-nuclear constraint and paid a price in the 2005 election. Last year in Washington Don Brash got aboard the anti-nuclear bus. That and other evolutionary changes seemed at last to point to a prospect of a near-bipartisan (two-big-party) foreign and defence approach to go with the one there has been on trade since 1999.

Another nudge has come from growing Australian acceptance, verging on endorsement, of this country’s military stance, among senior commentators and in the government. If Kevin Rudd is Prime Minister by year-end the gap between Canberra and Wellington will narrow further. Rudd is committed to a phased withdrawal of Australian troops from Iraq.

So it is a trifle ironic that trade, the topic on which bipartisanship first jelled, furnished the basis for Key’s claim that Clark’s trip was a “huge failure”.

In fact, the big result was in the Herald’s headline on Friday: “Bush: US can live with nuclear ban.” That was clear publicly a year ago and privately (most foreign affairs business is done privately) six months before that. But some still doubted.

OK, Key tried to say, Clark could have levered something on trade from that new friendliness and New Zealand’s Pacific usefulness to the United States.

Some of his comments sounded like demands that Clark should, or could, have brought back a free trade agreement (FTA) or a commitment from the other side to start negotiating one. Neither was, or could have been, in prospect, though there has for a year been no real doubt that when there is a negotiating list again, New Zealand will be on it. In any case Clark did talk trade at all points.

Key said Clark should have publicly made the FTA No 1 talking point. But to pin the trip on that objective would have exchanged success — the interment of the anti-nuclear stand-off — for failure. Getting enough movement to make an FTA hard news story takes time and this is not the time, with trade-sensitive Democrats newly in charge of the Congress, for startling breakthroughs.

For a plausible rationale for Key’s sound-bites, remember that his trade spokesman is former star trade diplomat Tim Groser.

Groser says there is a “strategic” case to be made now to United States officials for a study into an FTA which addresses Democrats’ concerns for environment and labour standards. Who better to do that than this country (as Clark herself said in Audrey Young’s interview yesterday)? By also giving a bit on Pharmac and accepting a dairy phase-in we could offer a model agreement of a new type.

Groser is known internationally as a highly innovative trade thinker. He broke brand new ground when he engineered the Singapore FTA talks in 1999.

And so when last week he also mused on an FTA with the European Union, as outlined on this page on Friday, European ambassadors pricked up their ears. Groser’s proposition did not come out of the blue. He has tested it with high European officials and found interest.

The EU has focused hitherto on new members and former colonies. With China threatening and bilateral deals proliferating round the world, now is logically the time for Europe to look outwards. And who safest to do that with first than tiny, open New Zealand (as the Chinese figured)?

Moreover, I understand the government here was not unhappy with his speech. That does not presage precipitate action. But it does suggest it is a real possibility if the Doha multilateral trade talks collapse completely.

For now all this drifts in the misty precincts of arcane diplomacy. But this past week just might turn out to have been the first phrase in a new chapter in our trading story. Next up? India, of course.

* Some readers think I implied last week the anti-smacking bill is a conscience issue. In fact the Speaker has not designated it a conscience vote so it is a party vote issue, though parties are free to split their vote.