John Key

Wellington, March 9 NZPA - The United States' decision to postpone trade talks involving New Zealand raises concerns about greater protectionism, Prime Minister John Key says.

Labour says Mr Key is overreacting to an administrative delay with the new United States administration and should be more positive.

Mr Key yesterday said the Government was deeply disappointed over the delay due to a trade representative not yet being appointed and because the new administration wanted to do a stocktake of trade agreements.

Today he said he hoped talks were paused not cancelled.

"We're obviously very disappointed; for our farmers that means less access for our manufacturers less access, and that's not a good thing," he told TVNZ's Breakfast.

"The bigger worry actually is if it sends the message of protectionism and those barriers start coming up around the world because we live in a world where there's 6.5 billion people, we're a small country, we trade with the world. About the last thing we want is countries putting up barriers around the world."

Mr Key said it would be interesting to watch upcoming G20 meetings between finance ministers and leaders to see if they put any pressure on the Obama administration.

Apec leaders and the G20 group of nations have warned that putting up trade barriers was not the way to get the world through the recession.

US President Barack Obama is yet to appoint a US trade representative as his nominee, Ron Kirk, has not been approved by the Senate.

Mr Kirk is scheduled to appear before the Senate's finance committee soon, where he will outline trade policy and his plans in order for them to confirm his appointment.

Labour MP Maryan Street said there was a lot of support in Washington for the deal and she believed talks would resume.

"The Government needs to be activating all its links and networks to keep New Zealand on the radar of the United States as its new administration settles in, rather than expressing deep disappointment at the delay which conveys negative connotations," she said in a statement.

Last year the US announced it would begin negotiations on joining the "P4" trans-Pacific trade pact with New Zealand, Chile, Singapore and Brunei. Since then Australia and Peru decided to join in the "Comprehensive Trans-Pacific Strategic Economic Partnership Agreement" as it is now known.

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 pact -- initially signed in 2005 -- aims to tear down tariff barriers among member countries within a decade. US accession to the pact could be worth up to $1 billion a year for New Zealand's economy.

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.

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