The Prime Minister’s recent visit to Washington, during which she seemed to have signed New Zealand up as a strongly pro-US outpost in the South Pacific – and her forthcoming (at time of writing) attendance at a major NATO meeting in Europe in the next few weeks – should prompt some serious thought about our long-term interests.
After all, it was the US which unceremoniously withdrew from the Trans Pacific Partnership shortly after Trump became President at the beginning of 2017, thus turning its back on the open Pacific trading group which seemed to promise so much for the other 11 counties which had signed up to it.
Historically, New Zealand was closely aligned with the United Kingdom – “where Britain goes, we go too” was the largely unquestioned assumption on which we built our foreign policy for decades. This was an automatic, indeed reflexive, stance which very few New Zealanders questioned. We sent troops to support Britain in the Boer War, and without question in the First World War.
In the Second World War, few questioned the need to oppose the megalomaniac Adolf Hitler, or to push back against Japanese military expansion.
But as time has gone by it has become a good deal less obvious that our interests automatically align with the US, let alone the UK, preoccupied as the latter has been for the last five decades with Europe.
We sent troops, rather reluctantly, to support the US in Vietnam, even though it was clear to some at the time – and to even more with the wonderful benefit of hindsight – that the war in Vietnam was essentially a civil war which had little or nothing to do with resisting China’s southward expansion.
The Fourth Labour Government decided that we were willing to face suspension from the ANZUS pact to demonstrate our strong opposition to nuclear weapons, and for the next few decades we worked hard to remain a very good friend of the US while remaining outside any formal alliance.
And we continued to be a member in good standing of the so-called Five Eyes group of countries, with the US, Canada, the UK and Australia – not a formal alliance, but a grouping of countries with a strong democratic tradition committed to sharing military intelligence.
After the appalling attacks on New York and Washington on 9/11, and like almost all countries everywhere, we were quick to denounce those who had committed such atrocities and most of us were supportive of the US when it determined to root out the Al Qaeda infrastructure in Afghanistan. We were more ambivalent when the US attacked Iraq on what turned out to be trumped up accusations that that country possessed nuclear weapons.
I suspect that most New Zealanders welcomed the deal which the US made with Iran, with the backing of Britain, France, Germany, Russia and China, whereby Iran would commit not to develop nuclear weapons – and submit to having international inspectors verify Iran’s compliance with that part of the deal – in return for the lifting of economic sanctions against the Iranian regime. And most of us were dismayed when Trump unilaterally torpedoed that deal largely, one suspects, for the same reason that he had withdrawn the US from the Trans Pacific Partnership, namely that both deals had been brought to fruition by the Obama Administration.
Indeed, what became clear during the Trump Administration was that American foreign policy could, to use an American expression, “turn on a dime” whenever the President changed his mind, as when he decided to abandon the Kurds in Syria. (To remind, the Kurds had been incurring substantial military losses supporting American policy in Syria. Apparently on a whim, President Trump decided to withdraw American forces in Syria, leaving the Kurds to fend for themselves. This was a significant factor in prompting John Bolton, until that point Trump’s National Security Adviser, to resign his position. When Trump was taxed on his decision to abandon the Kurds, he apparently asked in response “Where were they at Normandy?”)
So where are we today? We see a US which is enormously powerful militarily, and still – at least at market exchange rates – the largest economy in the world. It is a country which, probably since the end of the First World War, has been the dominant Power, and until recently the unchallenged super Power since the fall of the Soviet Union.
But now, on the other side of the Pacific, we see the rise of another huge Power, the economy of which at what economists call a “purchasing power parity exchange rate” is already as large as the American economy. Right now, the Chinese economy is grappling with three headaches – a grossly inflated property bubble, the government’s draconian reaction to the Covid pandemic, and actions taken by the US Administration to deny China access to some of the most sophisticated gear required for advanced electronics.
Unsurprisingly, the US feels threatened by China’s unprecedented economic growth over three decades, growth which would see the Chinese economy reach more than twice the size of the American economy if the Chinese people enjoy living standards only half as high as those of the average American, given that China’s population is some four times that of the US.
And China feels threatened by the US. Looking out from Beijing, the Chinese leadership sees American bases in South Korea, Japan and Guam, and American aircraft carriers cruising up and down not far from the Chinese coast. “Nothing to fear from us”, the Americans assert – “we’re absolutely within our rights and in international waters”. Quite so, but it isn’t surprising that the Chinese leadership sees those aircraft carriers and accompanying aircraft as menacing, and designed to “keep China in its place”. No doubt they wonder how the American government would feel if Chinese naval vessels were cruising up and down off the coast of California, or if 50,000 Chinese troops were based in Mexico.
All too easily we in New Zealand – and indeed in the west more generally – forget about the century of humiliation which China endured from about the time our forebears were signing the Treaty of Waitangi in 1840 until after the defeat of the Japanese in 1945 – first at the hands of various European Powers and then at the hands of Japan. Would this justify Chinese aggression? Of course not, but it would certainly help to explain why China seems very intent on building its armed forces and its influence around the global as rapidly as possible.
And where do New Zealand’s interests lie? We are certainly caught in an extremely awkward position with our traditional security ally in an arm-wrestle with our largest market. And not just our largest market: China is far and away our largest market, with that country taking some three times the value of goods exports of our second largest market, Australia. As recently as 2000, China took just 3% of our goods exports. In the year to April this year, China took some 30% of our total goods exports – and the share of dairy, meat and log exports going to China well exceeds that substantial figure.
“Diversify our exports”, plenty of armchair critics urge; “we should sell more to India instead”. Indeed, as the Deputy Chairman of the New Zealand India Trade Alliance, I would like nothing better than to see New Zealand’s exports to India grow substantially. But because India has high barriers to the goods which New Zealand exports, there is little prospect of seeing a big increase in exports to India any time soon.
And while recent efforts by the Biden Administration have led to the creation of the Indo-Pacific Economic Framework for Prosperity and the Americas Partnership for Economic Prosperity, neither of these deals offer much in the way of increased access to the American market for the goods that New Zealand exports. America appears to be becoming more rather than less protectionist.
This leads me to the conclusion also reached by both Helen Clark and John Key: we should be doing our damnest to remain on good terms with both the US and China.
......: we should be doing our damnest to remain on good terms with both the US and China.