But the trade minister Lockwood Smith said the strategy could undercut hopes for an agreement this year at the World Trade Organisation (WTO) over tariff cuts that would open trade worth more than $1 trillion in eight sectors.

The eight sectors are fish and fish products, environmental goods and services, forest products, medical equipment, energy, toys, gems and jewellery, and chemicals.

Smith, in Malaysia on the first leg of a regional tour, said New Zealand was working with other farm trade nations, including the US, to make sure the next round of world talks tackles the sensitive area of agriculture.

The Uruguay Round trade treaty, signed in 1994 after seven years of bargaining, left unfinished business in the area of agriculture which New Zealand wants taken up in the next round, expected to be launched laterthis year.

Smith said that the country was keen to see a "comprehensive round" that does not leave agriculture out in the cold. "We won't make progress in agriculture unless there are trade-offs," he said.

"Europe, for example, is not going to give up readily protectionism in agriculture unless they can actually make progress in industrials of interest to them or other issues of interest to them.

"So a comprehensive round offers that opportunity for trade-offs," he said. Ministers of WTO member nations are set to meet in the US in December to discuss a new trade round.

The European Union wants the next set of talks to be an old-style negotiation in which nothing is agreed in any sector until everything is agreed. But the US wants more fast-paced talks, particularly on politically sensitive farm and services sectors, that build momentum for more open markets.

Many developing countries, which are still trying to implement market opening agreements of the Uruguay Round, are wary of a new broad round oftrade negotiations. But Smith said he was not sure the WTO would be able this year to agree on cutting tariffs in the eight sectors that include fish and fish products, forest products and chemicals.