John Howard is all over various media this morning talking up his talk with China’s Wen Jaibao, trying to sound a little hairy-chested about a free trade agreement.

“We will want something additional and tangible to justify signing a free trade agreement and I’m sure that China will take the same attitude,” he said, while actually saying nothing at all.

Which contrasts rather sharply with the Kiwis quietly steaming ahead on a China FTA, PM Helen Clark saying they are on track to sign an agreement in April next year, becoming the first developed country to do so.

More importantly for New Zealand, the key ingredient for the Kiwis in such a deal is dairy and Ms Clark reported Wen has no problem with that.

Australia is chasing services and agricultural agreements, but doesn’t have nearly as much to show for it as New Zealanders. And agriculture is a double-edged sword.

While the somewhat erratic Chinese buying patterns lift or lower the wool price at will (currently at a five-year high), the more labor-intensive end of Chinese agriculture could be a real threat to some Australian industries. Australian poultry producers, for example, are very lucky to have various quarantine and disease claims to hide behind.

China wants resources security, meaning guaranteed preferential access to our mines, which flies in the face of a safer world through multi-lateral, free-market trade.

No wonder Howard is sounding tough – there’s not much on offer. He could be getting in his excuses first.

Peter Fray

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