Gulf states trade deal in doubt again following Qatari blow-up, English says

Rex Tillerson suggested all the countries of the GCC needed to address their financial support of extremist and terrorist groups.

The long-stalled free trade agreement between New Zealand and the Gulf Cooperation Council faces further delay following the decision by other members of the GCC to break ties with Qatar over its connection to financing Iranian terrorism.

Speaking to New Zealand media after talks with the US Secretary of State, Rex Tillerson, in Wellington today, Mr English said what had looked like a deal ready for signing was jeopardised by the latest developments among the wealthiest countries in the Middle East.

The GCC comprises Saudi Arabia, itself a long-time funder of Islamic fundamentalist movements, the United Arab Emirates, Kuwait, Bahrain, Oman, and Qatar. Egypt, Libya and Yemen also cut ties with Qatar in a dramatic development that not only sees diplomatic ties broken but land, air and sea connections with Qatar closed and Qatari citizens given two weeks to leave the countries in question. Kuwait and Oman have not so far joined the action against Qatar.

International media reports are questioning the impact of the Saudi-led rift on the GCC's future.

Negotiations for an FTA with the GCC have been under way since 2007, stalled in 2010, but had appeared to be back on track in the last few months.

"What looked like a smooth path a couple of months ago now looks like a pretty unpredictable one, Mr English said. "We've yet to see how all that unfolds. There seems to be quite significant action being taken quite quickly just in the past week. We'll keep an eye on it but I wouldn't be optimistic."

Answering a question from the New York Times at today's Wellington press conference, Tillerson suggested all the countries of the GCC needed to address their financial support of extremist and terrorist groups.

"I think that every country in the region has their own obligations they need to live up to," he said. "They have their own challenges to live up to that commitment to terminate that support for terrorism, extremism, however it manifests itself in any part of the world and I would say that's true of all the GCC countries. They have their own work to do."

Asked if his previous work with Exxon Mobil, which works in various Middle East countries including Qatar, would help or hinder him in when working through the crisis, Mr Tillerson said he “won’t comment on his past” with the company.

He did, however, say he has had dealings with “Qatar’s leadership now for 15 years, so we have got to know each other quite well.”

Meanwhile, Exxon is under fire in the US.

New York’s top prosecutor, Attorney General Eric Schneiderman, has accused the company of misleading investors about how it accounts for climate change risks.

Reuters reports that Mr Schneiderman said in court filings he has evidence of “potential materially false and misleading statements by Exxon.”

The statements could have led investors to think Exxon properly assessed the risks when it actually ignored a formula to estimate the impact of future environmental regulation on new deals.

Mr Tillerson, who was the chief executive of Exxon before being sworn in as Secretary of State earlier this year, made no mention of the report at today’s press conference.

Among other issues discussed was President Donald Trump's withdrawing the US from the Paris global climate change agreement.

Mr English expressed the New Zealand government's "disagreement" with the move while Labour Party leader Andrew Little expressed "disappointment."

Mr Tillerson told journalists the president had done no more than implement policy platforms he had campaigned on last year and that there had been little support on Capitol Hill for the Paris deal or, for that matter, for the Trans-Pacific Partnership trade and investment agreement, from which Trump withdrew as one of the first acts of his presidency.

"The United States has an extraordinary record of reducing greenhouse gas emissions, possibly unparallelled. Our greenhouse gas emissions are at levels last seen in the 1990s," said Tillerson. "That's been done with 50 million more energy consumers than we had in the '90s, with an economy that's twice as large. We're very proud of our record ... and that's been done without a Paris climate accord; it's been done without heavy regulation," Mr Tillerson said.

"It's been built on technology, innovation, entrepreneurship. We have every expectation that performance is going to continue. There's no reason it would stop. Engagement globally on climate change remains important and we'll be seeking ways to remain engaged. There are many ways we can do that."

Contrary to suggestions the US was following a more isolationist foreign policy, Mr Tillerson said of the Asia-Pacific region: "You can expect to see an elevated level of engagement to that which you saw in the last eight years."