Key readies international debut

Published: 1:25PM Friday November 21, 2008 Source: Newstalk ZB

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Prime Minister John Key has taken his first steps on the international stage, but it is the effect of a global downturn on the domestic economy which has him worried.

Key has touched down in the Peruvian capital Lima, ahead of talks with several world leaders at the Apec summit.

The Prime Minister is also Tourism Minister and is acutely aware of how that sector could be hit by the current global economic turmoil.

"You've got a weakening international position and that is certainly causing ... tourists to put their cheque books away and stay at home," Key says.

However, Key's arrival has been buoyed by a decision by the US, Australia and Peru to look at forming a free trade agreement with the P4. That group consists of New Zealand, Singapore, Brunei and Chile.

"Now that Australia has joined in - obviously our closest friend, ally and trading partner - we are creating momentum across the Pacific," Key says.

The new alliance has been dubbed the P7, and new Trade Minister Tim Groser says it would be part of the answer to working through the current economic turmoil.

In a joint statement, the 21-member Apec group says it will stand firm against any protectionist sentiment arising out of the worst economic crisis since the Great Depression.

The ministers are vowing to find a formula for tearing down tariff barriers by the end of December.

The issue is the main sticking point with the World Trade Organisation but would pave the way for an elusive global trade pact.

The really ambitious push is for a free trade zone right across the Pacific - but the gaps between rich and poor could make that difficult. The Apec economies are responsible for about half the world's trade, but there are vast differences in the wealth of these nations.

However, the argument is that free trade helps eradicate poverty rather than contribute to it. And it is a case Key will make when he speaks to the summit on Saturday, representing New Zealand on his international debut.

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