NZPA
Monday 18th July 2011 |
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Prime Minister John Key flies to the United States today to visit a president preoccupied by his country's debt crisis.
Key will meet US President Barack Obama at the White House on Friday and admits the timing could be better but that was out of his hands.
"It's a great opportunity, we don't get a lot of face time really," he told Breakfast on TVNZ.
President Obama and lawmakers are struggling to find ways to lift the debt ceiling and reduce the deficit as an August 2 deadline to prevent a default draws dangerously close.
Congress must raise the $US14.3 trillion ($NZ16.98 trillion) limit on US borrowing by August 2 or the government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession.
Key, who has met President Obama on four previous occasions, said the meeting at the White House was important.
"There's a great symbolism in a meeting at the White House and there's a lot to discuss."
Trade would be at the top of the agenda as New Zealand sought to pursue the Trans-Pacific Partnership (TPP) free trade deal.
The TPP negotiations started in Melbourne last year. The aim is to extend the previously-negotiated P4 trade agreement between New Zealand, Brunei, Chile and Singapore to include the US, Australia, Peru and Vietnam.
"We want to see deal completed," Key said.
By the time leaders met in Hawaii at the end of the year he expected significant progress.
"I don't think a deal will be signed but I wouldn't be surprised to see a heads of agreement or a letter of momentum or support or whatever being signed."
Discussions with the President were unlikely to delve into detail, such as concerns about New Zealand's drug buying agency Pharmac which US pharmaceutical companies do not like.
"We're not going to sign a deal that is not in New Zealand's best interests, Pharmac works very well for New Zealand. I think their bigger issue really is around intellectual property, that's really where their concerns are."
While in the States Key will also see Federal Reserve chairman Ben Bernanke.
Key declined to say if he thought the NZ dollar -- currently at US84.60c -- could go up even more.
"I don't want to speculate because a lot of people would be very concerned by that but I am very worried about what you see in the United States at the moment.
"They've got essentially zero interest rates so, in terms of monetary policy, there's no room to move, in terms of fiscal policy --how much money you can spend -- they are borrowing $4.6b a day, their deficit is $US1.4 trillion.
"It's not for us to tell the Americans how to run their economy, really we will go there and get a sense of what they think happens next."
High debt levels showed New Zealand was doing the right thing on focusing on getting it down, he said.
"We can't afford to be that exposed, but certainly it's putting a lot of pressure on our exchange rate."
Talks would also cover Afghanistan, the global and US economic outlook, the bilateral relationship, and other Asia-Pacific regional issues.
Key will also visit San Francisco and Los Angeles.
While in the capital, Key will meet with a range of US Government agencies and deliver a speech to the US Chamber of Commerce.
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