New Zealand leader, Obama look to warmer ties

New Zealand PM`s US visit culminates a long-drawn reconciliation with the United States.

Washington: US President Barack Obama welcomes New Zealand Prime Minister John Key to the White House on Friday as the two nations move beyond a 25-year rift and cooperate in areas from trade to Afghanistan.

Key`s visit culminates a long-drawn reconciliation with the United States, which formally suspended its alliance obligations to defend New Zealand in 1986 after the anti-nuclear nation banned US atomic warships from its waters.

In announcing Key`s visit, the White House said the leaders would discuss "the close friendship and partnership between our two countries" -- a sign of growing ties, but a notch below using the term alliance.

Secretary of State Hillary Clinton visited New Zealand in November, when the two countries agreed not to dwell on the nuclear issue and instead highlight cooperation in other areas, including military.

New Zealand has sent 70 elite special forces troops and 140 reconstruction personnel to Afghanistan -- a main focus for the Obama administration. Key paid respects to the war dead at Arlington National Cemetery on Thursday.

But Key`s visit comes at a hectic time for Obama, who is negotiating with lawmakers to avert a potentially disastrous US debt default on August 02. Two top senators were abruptly obliged to cancel talks with Key on Thursday.

Key, a former foreign exchange dealer, has voiced an avid interest in a resolution to the US standoff. The uncertainty has helped push the New Zealand dollar to historic highs against the US currency, bad news for the country`s vital export sector.

The Prime Minister, who met with Treasury Secretary Timothy Geithner, said it was crucial for the United States to reach a debt ceiling deal, while stressing that he would not personally get involved in US politics.

"Ultimately, the US is a third of the global economy," Key told reporters. "You are the economic powerhouse around the world, so we need the US to be successful and strong."

In an address to the US Chamber of Commerce, Key voiced hope for forward movement on the Trans-Pacific Partnership -- a free trade pact being negotiated by nine countries, including the United States and New Zealand.

"We think it is critically important for confidence around the world to show that progress can be made on trade," Key told reporters, referring to the deadlock in the Doha round of global trade liberalization.

The Obama administration has billed the Trans-Pacific Partnership as a way to make its own mark on trade. It reworked free trade pacts reached under former president George W Bush with Colombia, Panama and South Korea but is facing trouble moving them through Congress.

"We think there`s a real opportunity for the administration to show that momentum still exists," Key said.

He conceded that the Trans-Pacific Partnership would not be complete in time for an Asia-Pacific summit in November in Hawaii. But the Prime Minister said he would "like to see some sort of agreement signed at Honolulu that at least signifies that we`re on the right track”.

The Trans-Pacific Partnership involves Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.

The trade pact also has critics. Some lawmakers from US farm states have vowed to oppose the deal unless it excludes dairy products, fearing intense competition as New Zealand is the world`s largest dairy exporter.

Anti-globalisation groups have voiced concern at a lack of details on the talks and worried that major corporations would be able to supplant countries` health and environmental regulations.

Bureau Report

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