The government is deeply disappointed that the United States is postponing trade talks involving New Zealand that were scheduled to get underway at the end of the month, Prime Minister John Key says.
US President Barack Obama is yet to appoint a US Trade Representative as his nominee, Ron Kirk, has not been approved by the Senate.
Kirk is scheduled to appear before the Senate's finance committee in the near future, where he will outline trade policy and his plans in order for them to confirm his appointment.
New Zealand has pressed for years for a free-trade agreement with the US, but has faced strong opposition from US dairy and other farmers worried about opening the US market to a strong competitor.
The former US trade representative Susan Schwab announced last September the US would begin negotiations on joining the "P4" trans-Pacific trade pact early next year with New Zealand, Chile, Singapore and Brunei.
The pact - initially signed in 2005 - aims to tear down tariff barriers among member companies within a decade. US accession to the pact could be worth up to $1 billion a year for New Zealand's economy.
Key says a move to a trade deal with the US is an essential part of the future relationship between the two countries.
He understands the delay is due to the need for a new trade representative to be appointed and the need for a new administration to complete a stock take of trade policy.
"It is a disappointment but I think it needs to be put in the context at this point it has been postponed pending those two matters that need to be resolved."
Key hopes the talks will get underway later.
He says it will be a concern if it is part of a move to international trade protectionism due to the global recession.
Apec leaders and the G20 group of nation have all warned that putting up trade barriers is not the way to get the world through the recession.
New Zealand will continue to advocate very strongly for a trade deal.
"This is a postponement, not a cancellation," Key says.
There have been fears that the delay in appointing a new US trade representative could be a sign that the Obama administration will change policy due to the global recession.
However, the delay in confirmation could also be partly due to the approving committee being snowed under by work due to the international credit crunch, the huge holes in the US budget and the president's stimulus package.