15 Nov 2010

Regional trade deal could be in place next year - Key

3:03 pm on 15 November 2010

Prime Minister John Key believes a regional trade deal involving New Zealand and the United States could be finalised by the end of next year.

Mr Key met the leaders of the eight other countries involved in the Trans-Pacific Partnership negotiations on Sunday, while in Japan for the Asia-Pacific Economic Co-operation (APEC) meeting.

He says US President Barack Obama is keen for good progress to be made in time for next year's APEC meeting in Hawaii, and it is possible a deal could be reached by that time.

"There's always a lot of work to be done but it's looking good, and there's clearly a lot of other countries who are showing interest.

"They can see the momentum. I don't think they want to be left behind."

The Trans-Pacific Partnership negotiations involve nine countries: Australia, Peru, Chile, Singapore, Brunei, Vietnam and Malaysia, the US and New Zealand.

The APEC meeting at the weekend concluded with Japan, Taiwan and South Korea all talking of joining the Trans-Pacific Partnership.

However, trade lobbyist Stephen Jacobi says the negotiations still face challenges.

Mr Jacobi says the Japanese face stiff opposition from their farming lobby and could struggle to join talks before next year's APEC, when negotiations between existing members are due to be wrapped up.

Talks between South Korea and the US fell over late last week when the two countries failed to break a deadlock over access for American car makers.

Mr Jacobi says the delay potenitally harms New Zealand's chances of deals with the South Koreans, who will want to get the US deal sorted out first. However, he does not expect it will diminish the Americans' commitment to the Trans-Pacific Partnership.

New Zealand and South Korea have conducted four rounds of negotiations for a bilateral deal since June last year.