MNI INTERVIEW: NZ/EU May Miss Year-End FTA Target: NZ FinMin

--Set For Trade Talks With UK 'Whenever They Are Ready'

--Very Confident China-NZ Will Remain Important Trade Partners

--Says He Will Be Happy If Growth Remains Around 3% Forecast

By David Thomas

     WELLINGTON (MNI) - New Zealand and the European Union will not compromise

on the need to obtain a quality trade deal, even if it means missing their end

of year target for a comprehensive agreement, Finance Minister Grant Robertson

told MNI in an interview.

     "We want a high-quality agreement and we are not going to compromise ...

just to get a particular finish date," Robertson said, adding that both sides

would "work towards that ambitious timeline" but any agreement needed to meet

all stated aims.

     Robertson conceded "agriculture is an issue" in the talks, although both

sides are "making a genuine effort to work through the issues that have been

raised in the first couple of rounds in the negotiations."

     With Brexit fast approaching, Robertson also underlined New Zealand's

willingness to reach a free trade agreement with the UK. "Whenever the UK is

ready, we are ready" to start talks, he said.

     --REGIONAL CONCERNS

     He said that recent diplomatic tension with China will be worked through,

and that China remains a "very important export market" for New Zealand.

     "Like any other country, we have issues in our relationship and we will

work our work our way through those. That is no different from our relationships

with any of our other trading partners," Robertson said.

     New Zealand has expressed security concerns around Chinese telecom giant

Huawei's participation in the country's 5G rollout, but Robertson says he is

"very confident that New Zealand and China will remain good and close trading

partners".

     "It's the largest (market) or the second largest depending on the link with

Australia - and Australia's market is also extremely dependent on China," noting

China's influence on the region.

     --SLOWER GROWTH

     Robertson is unfazed by the somewhat slower domestic economic growth in the

third quarter of last year. Growth remains around a "pretty healthy" 3% and is

forecast by the Finance Ministry and the Reserve Bank of New Zealand to stay

close to that level.

     While these rates of growth might be slower than the 3.5%-4.0% often seen

in the recent past, they are also more sustainable, Robertson adds.

     "We have to be realistic - those levels were not sustainable," he said,

noting drivers of growth in the past included an overheating housing market and

population growth.

     The Labour party's stated strategy of transition to economic growth driven

by higher productivity, exports and employment growth will inevitably bring with

it "a little bit of reduction [in growth]."

     Should any slowdown prove more persistent, Robertson says that there is

flexibility within the government's fiscal rules to take action.

     "We will keep running surpluses and we will keep debt under control, but we

have always said if we were heading towards a global financial crisis type

situation we had the flexibility within the rules," Robertson said.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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