First reading: Obama's Pacific ambitions play well for New Zealand

BY VERNON SMALL

OPINION: John Key has Barack Obama to thank for turning what could have been a ho-hum outing at Apec into a minor triumph.

With news at home dominated by Hone Harawira's infamous  jaunt and taunt, the United States  president's announcement that the Trans- Pacific Partnership - a micro-free trade  bloc linking New Zealand, Singapore,  Brunei and Chile - was to be the means to  an Asia-Pacific free trade agreement was a  huge boon to the New Zealand delegation  in Singapore.

It had been expecting an announcement of sorts from the US on trade policy in the region; the pressure from Asian leaders for the US to step up has been intense, and there is even a realisation in the States that it is being sidelined by the alphabet soup of deals across the region.

But Mr Obama's endorsement of the TPP was more than they could have hoped for.

It warms up the talks that were put on ice by the new regime in Washington and added a strong new impetus that should make it easier for New Zealand to open the doors to our agriculture products. (Australia spectacularly failed to jemmy them open in its bilateral FTA with the US.)

Vietnam, Australia and Peru are already lining up to join. Canada and Mexico are expected to be close behind; though extending it to the big Asian economies including China, South Korea and Japan will present a different order of difficulty.

And even if Mr Obama enthusiastically named himself the first Pacific president - his home state is Hawaii, but he seemed to ignore the credentials of presidents from California such as Ronald Reagan - a deal on even a limited TPP is by no means certain, as a sceptical US media immediately pointed out.

There are still big issues at home for Mr Obama to address, not least, as unemployment surges over 10 per cent, convincing Congress and the big farming and labour union lobby groups that enhanced trade with Asia will create jobs, not destroy them.

He also has to convince them - and the countries of Asia, with their low-currency strategies - that a major shift is needed in the world's economic balance; from a regime under which the US borrows and consumes cheaper Asian exports, to one in which the US boosts its export performance and wealthier Asian consumers buy their share of the US' output.

At home, Mr Key will have to convince voters that opening up New Zealand to greater US investment, and making concessions on copyright and Pharmac's drug-buying power, will be more than compensated for by greater access for our agricultural products.

"What's good for Fonterra is good for New Zealand" is not an idea that is universally accepted.

Meanwhile, any paternal pleasure New Zealand could take over having its baby named the chosen one - the TPP started life as a deal between NZ and Singapore - was quickly put into perspective. Within hours, Australian Trade Minister Simon Crean had announced that Australia, though not yet part of the TPP, would provide the venue for the first round of substantive talks.

That was news to Mr Key, when reporters asked him about the announcement.

As much as anything, it made the point that the US and its deputy sheriffs are still the biggest powerbrokers in the region, despite the rise of Asia, and China in particular, as an economic powerhouse.

Along with Mr Key's slim pickings on bilateral meetings, it put New Zealand's third-tier status into sharp focus at Apec.

Even if he took the message from being put in his place down the end of the table, next to Sir Michael Somare of Papua New Guinea, Mr Key at least scored three informal chats with Mr Obama and generally looked relaxed and "at home" in Singapore.

The island city state was told how he shared a birthday with it on August 9 - though at 44 Singapore is four years younger.

Don Brash may have had a wife from Singapore once.

But Mr Key's son Max was born there 15 years ago, during his stint with Bankers Trust, he told a gathering, mostly of expatriates, at a cocktail party to promote the Rugby World Cup.

He even felt relaxed enough to invite the travelling media to join him, wife Bronagh, Trade Minister Tim Groser and his staff at one of his old haunts, a seafood restaurant called No Sign Board near Changi airport; where no chilli crab was safe.

At a meeting of CEOs he drew on his experience to advise policymakers how best to control big salary bonuses and reward risktakers: focus on long-term returns, not short-term profits.

Not exactly a barnstorming Apec for Mr Key, but a solid effort made better by Mr Obama's announcement.

He will be hoping that by 2011 - when New Zealand goes to the polls and Hawaii hosts Apec - there will be some solid gains to add to the free trade rhetoric.

- © Fairfax NZ News