N.Z.'s Key to push free-trade pact

WELLINGTON (Kyodo) New Zealand Prime Minister John Key is coming to Japan on a mission: He wants to press his case for a bilateral free-trade agreement.

Kiwi pitch: New Zealand Prime Minister John Key is interviewed recently in Wellington. KYODO PHOTO

Key starts his six-day trip Tuesday. He plans to meet with Prime Minister Yukio Hatoyama as well as Emperor Akihito and visit a number of companies.

This will be Key's first visit to Japan since he ousted Helen Clark in a general election last November.

New Zealand's largely agricultural-based economy has recently completed an FTA with China and is currently negotiating another with India.

With Japan ranking as New Zealand's fourth-largest trading partner, Key is keen to make progress on the New Zealand-Japan FTA front.

New Zealand exports a range of products to Japan, including meat and dairy products, seafood and high-quality aluminum and coal, to the tune of 3.6 billion New Zealand dollars (about $2.6 billion) in 2008.

Japan supplies New Zealand with mainly high-tech, industrial goods, including cars and trucks. The value in 2008 was NZ$4.0 billion.

Key said his government held preliminary discussions with the administration of Prime Minister Taro Aso earlier this year and is now keen to learn the position of the Hatoyama government.

While Key admits Japan has a historically strong agricultural sector that would need to be taken into consideration, he believes the long-term benefits of free trade are unquestionable.

"It's my belief that the balance of net benefit would be greater for Japan to sign an FTA depending on what conditions were there," he said.

Although Hatoyama is cautious about liberalizing Japan's agricultural industry, Key points to China as an example of a country with a strong agricultural base that has concluded an FTA with New Zealand.

Key added that an FTA could be just what Japan needs to boost its recently stagnated levels of economic growth.

"I think it's for the Japanese government to determine what the right prescription is to turbocharge their economy, but certainly international evidence shows that FTAs are an important part of the mix," Key said.

Another key issue on the table will be Hatoyama's recent proposal for an "East Asia community," which would include Japan, China, South Korea and members of the Association of Southeast Asian Nations, as well possibly New Zealand and Australia, but probably not the United States.

Australian Prime Minister Kevin Rudd earlier proposed a similar idea, known as the "Asia-Pacific Community," which would group together a larger number of countries in the region.

Key said he welcomes the dialogue for both leaders' proposals because existing structures are lacking in scope.

"None of them look at a combination of trade, geopolitical and security issues and have a completely comprehensive engagement with all countries in our region," Key said.

"Some of the appeal with (Rudd's) Asia-Pacific Community is because it included Japan, China, India and the United States along with Russia," he added.

While the exclusion of the United States in Hatoyama's vision would not deter New Zealand from joining the East Asia community, Key said he believes there is merit in engagement with the United States in a multilateral arrangement.

In a recent speech to the U.N. General Assembly, Key outlined his "Global Alliance" proposal aimed at reducing agricultural greenhouse gas emissions.

New Zealand already has one of the highest levels of renewable energy in the developed world, with 70 percent its energy harnessed through wind and solar sources.

For New Zealand to reach its target of reducing carbon emissions by 10 percent to 20 percent of 1990 levels, the country must find a way to reduce agricultural emissions, which amount to half of the nation's total emissions.

The Global Alliance will conduct research into a technological solution to methane and nitrate gas emissions, largely from livestock like sheep and cows.

Key said there has been a lot of interest in becoming involved in the proposal from both the public and private sectors because of the clear impact on food security.

"New Zealand is quite a large producer of export agricultural products, so on that basis if we stop exporting to the world, that's going to put a lot of pressure on countries that rely on New Zealand as a food source," he said.

Once the technology to reduce agricultural greenhouse gas emissions has been developed, this would then be transferred to emerging economies for free, Key said.

Key also praised Japan for being "very generous and prepared to put money toward helping developing countries come to terms with their climate change positions."

With Hatoyama's ambitious target for Japan of a 25 percent reduction in carbon emissions, in addition to the country's high agricultural emissions, Key said Japan could also benefit from involvement in the Global Alliance concept.