Jenny Shipley Leader of the Opposition

Max Bradford National Foreign Affairs and Defence Spokesman

31 July 2001

Govt defence cuts have cut NZ out of US free trade agreement

New Zealanders should be alarmed by the devastating news today that Australia and the United States look set to proceed towards a free trade agreement, National's Jenny Shipley and Max Bradford said today.

"The most striking thing about today's media reports is the fact that Australia and the US are drawing a direct linkage between their foreign affairs and defence arrangements - and the trading opportunities for the people of Australia," Jenny Shipley said.

"This is exactly what Max Bradford and I warned Helen Clark against for a great many months prior to her decision to cut New Zealand's defence force capabilities. Helen Clark's refusal to accept that there was a direct link is about to reap serious consequences for New Zealanders and our exporters.

"There is now a direct and undeniable link between Helen Clark's defence cuts and New Zealand's future standard of living," Mrs Shipley said.

Reports in Australian media today say US Secretary of State Colin Powell and US Defence Secretary Donald Rumsfeld have deepened the Australian-US relation across a number of fronts including defence and trade. The secretaries were attending the 50th anniversary of the ANZUS treaty, to which New Zealand was not invited.

"When Helen Clark announced her defence decisions in May, Australian Prime Minister John Howard said there would be 'domestic and international consequences' as a result of her Government's cuts to New Zealand's defence," Max Bradford said today.

"The first consequence is that New Zealand is not involved in the current Australia-US talks. A further consequence is that New Zealand will not be part of the seemingly inevitable free trade agreement discussions.

"If that agreement goes ahead the economic fallout will be devastating for New Zealand. Our standard of living, relative to Australia, would fall dramatically as Australian manufacturers and exporters gained access to the largest and wealthiest market in the world.

"All the fantastic ideas at the Catching the Knowledge Wave Conference this week are likely to be of little benefit when the Government has demonstrated its incompetence and unwillingness to acknowledge the direct link between foreign affairs and trade - a link which is likely to have a profound impact on our future prosperity," Jenny Shipley and Max Bradford concluded.

ENDS

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