UNCLAS SECTION 01 OF 02 WELLINGTON 000509

SIPDIS

SENSITIVE
SIPDIS

EAP/ANP, EB, INR, PACOM FOR J01E/J2/J233/J5/SJFHQ, STATE
PASS TO USTR, USPTO, COMMERCE FOR ITA

E.O. 12958: N/A
TAGS: ECON ETRD KIPR PREL NZ
SUBJECT: NEW ZEALAND'S MINISTER OF TRADE, PHIL GOFF
EXPLORES POSSIBILITY OF REGIONAL FREE TRADE AREA WITH
VISITING U.S. DELEGATION IN NZ FOR TIFA TALKS

1). (SBU) SUMMARY: New Zealand's Minister of Trade, Phil Goff
met briefly with the U.S. TIFA delegation on Tuesday, July 7,
in his office to solicit their assessment of the TIFA talks
and discuss the status of trade promotion authority
legislation in the U.S. Congress. Minister Goff had
discussed the status of U.S. Trade Promotion Authority (TPA)
legislation extensively during his May Washington trip and in
meetings with USTR Schwab in Cairns last week. Minister Goff
explored options which may advance a U.S.-New Zealand's Free
Trade Agreement (FTA). He expressed interest in considering
the New Zealand's Trans-Pacific Strategic Partnership (P4)
Agreement as a foundation for a broader regional free trade
area. Discussions also focused on the specifics of resistance
in the U.S. domestic markets to competition from NZ
agricultural products.

2). (SBU) New Zealand Trade Minister Phil Goff met July 10
with Assistant U.S. Trade Representative Barbara Weisel,
James Murphy and Cathleen Enright of USTR, along with Ariadne
Benissa of Commerce Dept., Khalaika Meardry of USDA,
Wellington DCM David Keegan, and Acting Pol/Econ Chief Tom
Walsh. Weisel told Minister Goff that the TIFA talks were
going well and more in-depth than initially expected. The
Minister again expressed his wish to secure an FTA and raised
the possibility of using New Zealand's concluded
Trans-Pacific Strategic Partnership ("P-4") Agreement as a
means toward this end and possibly as a path toward achieving
a broader regional trade agreement. Weisel explained a
regional agreement could be achieved through one of three
paths: 1) negotiations de novo, 2) harmonizing current trade
agreements, or 3) building on extant regional FTA clusters.
This prompted Minister Goff to suggest possibly building on
"P-4" which is a free trade area consisting of NZ, Chile,
Singapore and Brunei to provide the required architecture for
an expanded trade arrangement between NZ and the United
States.

3). (SBU) Weisel

explained that the TIFA discussions had
provided an opportunity to discuss in more detail other
third-party FTAs being negotiated by both countries,
including the P-4 agreement. While USG internal review has
revealed that the P-4 agreement is broadly similar to the
U.S. FTAs with Singapore and Chile, Weisel also noted that,
in its current form, it would not meet the requirements of
U.S. Trade Promotion Authority (TPA). She noted shortfalls in
many chapters, including the significant differences between
the intellectual property (IP) chapters of U.S. FTAs and the
P-4 Agreement. (Note: in TIFA talks, New Zealand emphasized
that it was open to amending the P-4 Agreement if a
"significant trading partner" were interested in acceding to
the Agreement. End note). Goff proffered that an ideal
solution would combine the P4 plus NAFTA plus Australia. He
stressed this approach because, he opined, an APEC FTA is
unlikely to occur any time soon.

4). (SBU) The discussions then shifted from the possibilities
of broader regional free trade architecture to the specific
issues causing resistance from U.S. agricultural interests to
an FTA with NZ. USTR's James Murphy explained the U.S. dairy
lobby was concerned about perceived competition from NZ
farmers and the unsettled political climate underlying
efforts to secure TPA (What does this last part refer to?).
Goff asked why a similar set of concerns about dairy and
agriculture didn't prevent the U.S. - Australia FTA from
going forward. Barbara Weisel explained that one of the key
differences between the Australia and New Zealand markets was
the positive influence of the significant off-setting
industries not present in the NZ economy. While Minister Goff
stressed the need to fight against protectionist proclivities
particularly in light of the negative effect these forces
have had on achieving Doha goals, he agreed with the U.S.
delegation that the TIFA talks continue to be an opportunity
to move forward by targeting work on mutually beneficial
areas.


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5). (SBU) Following this meeting, Minister Goff addressed the
Action Asia Summit in Auckland where he expounded on a two
prong approach to advancing free trade, i.e., "Plan A" and
"Plan B." (A copy of his speech notes will be sent separately
by email to State and USTR.) The Plan A approach - a
successful Doha Round outcome - the details of which he
expounded last week at the APEC meeting of Trade Ministers in
Cairns. At the meeting, Goff called for "a commitment by all
21 member economies - responsible for 50 percent of world
trade - to engage actively and constructively with
Negotiating Group Chairs to seek a final agreement (for
Doha)." If, however, this is not possible his Plan B approach
envisions a grouping of "progressive economies including the
U.S., Canada, Mexico, Australia, the P-4 countries , Korea
and others which could reach a high quality Free Trade
Agreement." Goff realistically stated that, "this option
(Plan B) has not yet been tested but could be explored if
avenues such as the Doha Round do not come to fruition." The
Minister was actively testing the viability of Plan B in his
conversation with the TIFA delegation (see para. 4).

KEEGAN