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DACOR Bacon House •
1801 F
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•
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• 202 842 0772 • Fax 202 842 0749
fred.benson@usnzcouncil.org
February 9, 2004
Honorable
Robert Zoellick
United
States Trade Representative
600 17th Street
Washington
,
DC
20508-4801
Dear Mr. Ambassador,
I
am writing to congratulate you and your staff on reaching a successful
conclusion of the US-Australia FTA negotiations. This result marks the end of a
challenging process that tested the skill and patience of a number of truly
dedicated USTR trade professionals.
Well
done!
With
the US-Australia agreement now achieved, our urgent request is that you begin
discussions to bring
New Zealand
into the FTA picture as soon as
possible.
The
US-New Zealand Council has enjoyed steady progress in enhancing business support
for initiation of a US-NZ FTA. Our list of supporters (attached) has grown to a
total of 314 signatories, and Council membership has strengthened significantly
over the past two years.
We
continue to believe that a US-NZ FTA is good for both parties as it will be one
of the least difficult agreements to reach, and because it involves two nations
that have enjoyed a long-standing, high profile, joint leadership role in trade
liberalization.
New Zealand
’s current deployment of troops
through
Afghanistan
and
Iraq
is firm evidence of a remarkably
strong commitment to join with the
US
in the effort to combat global
terrorism. We are partners in many ways.
We
are concerned that if the
US
were to have an FTA with
Australia
and not
New
Zealand
, economic harm would likely result to
the excluded partner through investment diversion. This is particularly
important as one considers the comprehensive FTA (CER) in existence for over
twenty years between
Australia
and
New Zealand
.
The
US and
New Zealand
have been close friends for over a
century. We can’t imagine that the
US
would intend to take steps resulting
in direct harm to such a long-term partner in many important ventures.
I
would also like to address comments attributed to you in a recent media
interview.
It
is reported you mentioned that the concerns you had about moving forward with a
US-NZ FTA centered on “sensitivities in terms of dairy, sugar and beef” that
could be problematic in moving an agreement through Congress. I offer the
following data that, in the aggregate, suggest these issues should not be
“show stoppers” but, rather, are just part of the normal ebb and flow of
trade negotiating expectations.
·
Sugar:
New Zealand
has no sugar production.
New Zealand
is a net importer of sugar. This should not be
an issue at all.
·
Dairy:
NZ's dairy output is less than 3 per cent of global dairy production.
A simulation undertaken by the Institute for International Economics (IIE)
concluded US domestic dairy production would decline by only 0.5 per cent as a
result of completely open trade with
New Zealand
. This fact, coupled with the burgeoning joint
venture and investment opportunities being taken by the NZ dairy industry in the
United States
, indicates that dairy should be a manageable
issue in a US-NZ FTA negotiation.
·
Beef:
New Zealand
’s beef industry is not large. Imports of
New Zealand
beef represent a mere 2% of
US
beef consumption. In addition, imports of
New Zealand
beef complement, rather than compete with,
US
domestic beef production. Imports of lean beef
from
New Zealand
are mostly blended with high fat beef produced
in US feedlots creating an additional market for US producers.
We
appreciate that there are many issues involved in the decision to move forward
with an FTA partner, but we firmly believe that on balance
New Zealand
is one of the strongest candidates with which the
US
has not yet engaged in FTA negotiations. Because of that, we request that
serious consideration be given to beginning discussions leading to a US-New
Zealand FTA as soon as possible.
We
would be pleased to provide more detail on any part of the Council’s
activities should you deem that helpful.
Very
respectfully,
Frederick S.
Benson III
President
United
States
–
New
Zealand
Council
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