New Zealand First will vote against the China free trade agreement and leader Winston Peters will speak against it overseas in his role as Foreign Affairs Minister.
The position, outlined today by Mr Peters, creates the unusual situation of having a Foreign Affairs Minister at loggerheads with the Government over what most people view as a key part of foreign policy.
However NZ First's opposition is not enough to endanger legislation ratifying the deal, which has the backing of National, ACT, United Future and the Progressive Party.
Outlining his reasoning, Mr Peters said the deal did not contain enough concessions on the Chinese side to make it worthwhile.
In the past few days Prime Minister Helen Clark has repeatedly stressed the FTA's wider strategic value and its importance to New Zealand's national interests.
But Mr Peters disagreed with the suggestion that the trade deal was a key piece of foreign policy.
He viewed it as trade policy, which he believed could be separated from his ministerial role.
However if he was asked, while travelling overseas as Foreign Affairs Minister, for his opinion he would not refrain from bagging the deal.
"If I'm asked I will tell the truth that I would have hoped we could have done much better," he told reporters.
"Obviously in that circumstance I'd be speaking as Foreign Minister and I will tell them the circumstances behind which we went into trade negotiations."
He said those circumstances were New Zealand's premature removal of tariffs in the 1980s and 1990s, which meant it was starting at a disadvantage that needed to be addressed in any trade agreement.
Mr Peters said he had briefed the Government of the position under the "no surprises" clause of NZ First's support agreement and the party had been clear in post-election negotiations that it would look at trade deals on a "case by case" basis.
The two parties were "agreeing to disagree" and the support agreement was not threatened.
Miss Clark today said NZ First's position came as no surprise and she was "totally relaxed" about it.
NZ First had made its position on trade deals with developing countries clear in post-election negotiations and when the post of Foreign Affairs Minister was offered to Mr Peters it was made clear he would have no responsibility for trade.
She had been told yesterday of Mr Peters' planned statement today.
She said the situation was part and parcel of MMP politics.
"Probably most western countries outside the Anglo-American countries have coalition governments," she told reporters in Beijing.
"Confidence and supply based agreements survive because people accept a degree of diversity.
"I've run minority governments for eight and a half years, always accepting diversity. In the case of New Zealand First it is not in a formal coalition with us.
"In the case of the Alliance in our first term of government, they differentiated on the issue of the Singapore FTA from within the government and didn't support it.
"So I'm afraid this is MMP politics. What matters is that there is huge support for this within the New Zealand Parliament."
However she disagreed with Mr Peters over the quality of the deal.
She said the FTA made "a lot of progress".
National leader John Key said he did not think Mr Peters' position would be damaging to New Zealand, but it would come across as "odd and strange".
Mr Peters said NZ First wasn't necessarily against trade deals, but the China FTA did not go far enough to address a $3.6 billion trade deficit.
"Just over two decades ago the trade doors to New Zealand were thrown wide open in the vain hope that the rest of the world would reciprocate but that has still not happened.
"Under this FTA we will have to wait up to another 17 years to get the full benefits that have been promised," he said
"Given that China has effectively had half a free trade agreement with New Zealand for the past 20 years we could have expected more from them."
Other reasons he outlined for opposing the deal were:
* FTAs with both Thailand and Singapore had resulted in a worse imbalance of trade.
* China's low wages and labour standards made it difficult for local firms to compete;
* The provisions allowing 1800 Chinese workers into New Zealand outside normal immigration channels;
* providing up to 1000 young Chinese with working holiday visas without any reciprocal arrangement for young New Zealanders;
* increasing levels of food imported from China which was threatening domestic sale of New Zealand primary goods.
Mr Peters said the clauses in the FTA relating to investment were also of "great concern".
Mr Peters said NZ First believed tax incentives and a realistic currency value were the way to drive export growth.
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