Politics: How to mix old and new friends

April is Australia-New Zealand month, with China thrown in –a variation on February, which was Australia-New Zealand-United States month. That highlights the external priorities which New Zealand has to balance in the 2010s.
New Zealand has regular “track 2” forums with Australia (the oldest, formed in 2004), the United States and Japan. They bring together business and other sector leaders, officials and ministers. They are unofficial, aimed at deepening connections and building joint constituency for action on bilateral matters and combined actions abroad.
The United States forum was meeting in Christchurch on February 22, the day of the devastating aftershock. Bonding took novel turn at lunch: under the table.
Also interrupted were the third trilateral talks at high official level, including Australia. The first – and only – topic covered was rundown of the United States’ latest analysis of China.
The Australian forum next meets on April 8-9 in Auckland.
It will be preceded by semi-academic conference on China, Australia and New Zealand: the different interests, perspectives and outlooks. Last year’s Otago University’s annual foreign policy school conference was on China and the bilateral relationship. Now there are ambitions to put together “track 2” forum with China.
This China syndrome illustrates the sea change in New Zealand’s external relations. It will require tricky navigation.
First, there is the close relationship with Australia, affirmed by Julia Gillard’s February visit. The economies and societies are deeply intertwined. Anzac Day this month reminds us of that.
But there is also big difference. Australia’s strategic policy centres tightly on its military alliance with the United States, an alliance which plugged it automatically into the Iraq invasion. It thinks itself serious power. Its defence white paper two years ago called China potential threat. Australia cannot get traction in its bid to match New Zealand’s free trade agreement (FTA) with China.
That FTA owes much to New Zealand’s multilateral, non-alliance-based foreign and strategic policy.
In turn, Australia has an FTA with the United States (although heavily qualified one) which is attributable to the goodwill forged by their alliance. New Zealand lost that goodwill when it went anti-nuclear. The United States took that as grave affront and threw New Zealand out of the then three-way Anzus alliance.
The gush from the Christchurch forum in February was that the United States connection is back to deep and cosy. Except for formal alliance and for not being granted annual ministerial meetings, the rift is completely healed.
A good part of the reason is the United States’ need for friends with like values in the South Pacific, where China has long been buying and building influence. New Zealand’s special relationships in Polynesia and easier acceptance than Australia in Melanesia are valuable to power play Secretary of State Hillary Clinton has labelled “unbelievable” competition.
From New Zealand’s (and Australia’s) perspective, the United States’ re-engagement in Asia – it is now member of the East Asia Summit – is important and, John Key says, very welcome. New Zealand shares Singapore’s desire for counterweight to China in the region.
But factor in China’s greater importance as trading partner than the United States. Add that China’s heavyweight buying of Australia’s minerals keeps that country rich and its exchange rate high which boosts our manufacturing sales in Australia.
Then note that the big advantage of the FTA is access to the people behind the border who can sort out problems.
That adds up to caution: getting snug in bed with the United States, especially if as cuddly threesome with Australia, might blow light chill through our door into the world’s No 1 economic superpower in the making. Singapore’s positioning is carefully calibrated. Is New Zealand’s?
It’s great to be back with an old friend – just so long as it doesn’t miff the new one. M

Colin James is New Zealand’s leading political commentator and NZ Management’s regular political columnist. [email protected]

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