New Zealand’s Subtly Shifting Foreign Policy

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New Zealand’s Subtly Shifting Foreign Policy

In the last two years, the COVID-19 pandemic and the China-U.S. trade war have forced the New Zealand government to diversify its trade and diplomatic relations.

New Zealand’s Subtly Shifting Foreign Policy
Credit: Facebook/Jacinda Ardern

Multilateralism has long been a central pillar of New Zealand’s foreign policy. When dealing with China and Western allies like the United States, New Zealand has tried to make its foreign policy predictable and consistent. In the last two years, the COVID-19 pandemic and the China-U.S. tensions have not changed New Zealand’s basic policy toward China, but they have forced the New Zealand government to diversify its trade and diplomatic relations.

New Zealand’s Defense Assessment 2021 demonstrates that Prime Minister Jacinda Ardern’s government regards strategic competition between China and the United States as a threat to New Zealand’s security. As a response to the challenges to its foreign policy, New Zealand is consciously attempting to rely less on China economically, which does have political implications. The development of New Zealand’s foreign policy can be observed in three aspects: Wellington’s participation in international and regional organizations, the diversification of its foreign relations, and its subtle adjustments to its policy toward China, particularly concerning some political and international issues such as the South China Sea.

Participating in International and Regional Organizations

New Zealand has actively participated in international organizations such as the World Trade Organization (WTO), the World Health Organization (WHO), and the United Nations. Being aware of its geographical position and its small size, New Zealand thinks that only by joining multilateral institutions can it successfully advocate its positions and advance its national interests. At conferences of these international organizations, New Zealand calls for free trade systems, COVID-19 vaccination coverage, non-proliferation of nuclear weapons, carbon emission reductions, environmental protection, and protection of human rights.

Indeed, the COVID-19 pandemic has posed a big challenge to the world economy and global trade, health, and social stability, but the Ardern government does not think protectionism is the right solution. Instead, the government has worked with Singapore, Canada, Australia, Chile, Brunei, and Myanmar to keep supply chains open and has removed any existing trade restrictive measures on essential goods, especially medical supplies, in the face of the COVID-19 crisis.

As regards responses to the pandemic, Wellington strongly supports the WHO’s Independent Panel for Pandemic Preparedness and Responses, which is co-chaired by Helen Clark, the 37th prime minister of New Zealand. In addition, it contributes fund and doses to Gavi COVAX Advance Market Commitment, a financing instrument that provides aid to 92 low- and middle-income economies. New Zealand is also working with the WTO and APEC to support a waiver of intellectual property rights on vaccines.

Not only is New Zealand reinforcing its cooperation with the international organizations mentioned above, but also it is seeking to strengthen existing regional partnerships (CPTPP, ASEAN, APEC) and initiate a new framework (the Digital Economy Partnership Agreement, or DEPA) to deal with the economic downturn caused by the pandemic. To be specific, Wellington has already conducted CPTPP negotiations with the U.K. and British Foreign Secretary Liz Truss said her country expected to be able to join the CPTPP by the end of 2022. Furthermore, ties with ASEAN have been enhanced. New Zealand has ratified the Regional Comprehensive Economic Partnership (RCEP), which will enter into force on February 1. To be more resilient in the face of the COVID-19 pandemic, New Zealand, Singapore, and Chile have signed the Digital Economy Partnership Agreement, which represents a new type of trade agreement to promote the digital economy. At the opening of the APEC CEO Summit in November 2021, Ardern stressed her country’s efforts to support trade in the digital area. From the perspective of the New Zealand government, frameworks such as DEPA, the CPTPP, and RCEP will surely help New Zealand recover from the pandemic.

Diversifying Foreign Relations

One distinct feature of the Ardern government is that it has tried to diversify trade away from China. Progress has been made in this regard since the second half of 2021, as illustrated by Trade and Export Growth Minister Damien O’Connor’s travel to Europe and the United States and Foreign Minister Nanaia Mahuta’s seven-country tour of Australia, Singapore, Indonesia, the UAE, Qatar, the U.S., and Canada.

O’Connor’s travel aimed to advance New Zealand’s trade and economic interests with key partners, including members of the G-20, whose trade ministers held a meeting in Italy. A significant achievement was the conclusion of the NZ-U.K. Free Trade Agreement. O’Connor also availed himself of this opportunity to progress the EU-NZ FTA. Though New Zealand is not a member of the G-20, O’Connor represented his country to attend the G-20 Trade Ministers’ meeting, which provided a chance for him to discuss trade issues with some members of the grouping. When meeting with the United States Trade Representative Katherine Tai, for example, O’ Connor discussed APEC, digital trade, and the trade and investment relationship between the two countries.

O’Connor’s travel to Europe and the United States naturally focused on trade. Mahuta’s seven-country tour, however, was not only about trade and the economy. Her visits are also of cultural and political significance.

First of all, as New Zealand’s first indigenous female foreign minister, Mahuta has made a commitment to promote Maori values. Her meetings with her counterparts in the UAE and Qatar surely helped to expand markets for New Zealand’s exports, but they coincided with New Zealand’s hosting of the Te Aratini Festival of Indigenous and Tribal Ideas at Expo 2020 Dubai. The UAE and Qatar also played key roles in New Zealand’s emergency evacuations from Afghanistan in August 2021. Plus, according to Geoffrey Miller, “Mahuta’s visit to Doha may be a chance to start thinking about opening an embassy” in Qatar.

Mahuta’s trip to Singapore was also important. New Zealand has a close relationship with Singapore in both trade and defense. As mentioned earlier, New Zealand and Singapore are both members of DEPA and Singapore has made a commitment with New Zealand to keep supply chains open for essential goods needed to deal with the pandemic. Furthermore, the year 2021 marked the 50th anniversary of the Five Power Defense Arrangements (FPDA), in which New Zealand and Singapore are both members. Concerning the China-U.S. trade war, both countries do not want to choose sides. Being small players, both support multilateralism and free trade. These similarities have made New Zealand and Singapore close.

Last but not least, Mahuta’s visits to Australia, Canada, and the United States have enhanced New Zealand’s relationships with these countries. Wellington shares similar political and cultural values with these democracies in spite of differing positions on some issues such as non-proliferation of nuclear weapons. Mahuta exchanged views with counterparts Marise Payne, Melanie Joly, and Antony Blinken on the Indo-Pacific, AUKUS, the COVID-19 pandemic, and policies toward China.

Adjusting Policy Toward China

On the one hand, New Zealand has concluded the China Free Trade Agreement upgrade, which shows its consistent policy toward China. On the other hand, Wellington is subtly adjusting its China policy by diversifying trade away from China and speaking out publicly on issues pertaining to the South China Sea and the Indo-Pacific region.

At the 2021 NZIIA Annual Conference, Ardern said her country embraced the concept of an Indo-Pacific as the wider home for New Zealand. Her speech implied that New Zealand did not oppose the presence of China and the United States in this region if their engagement was good for the stability and prosperity of the Indo-Pacific. Nevertheless, New Zealand’s Ministry of Defense considers China’s rise as the major driver of growing strategic competition (most visible between China and the United States), which will threaten New Zealand’s security. The Defense Assessment released in December 2021 suggests that the United States is New Zealand’s international security partner and that New Zealand’s most important Asian defense partners nowadays include Singapore, Malaysia, Japan, South Korea, Vietnam, and Indonesia. China, however, is not mentioned.

Concerning the South China Sea, the New Zealand government has become vocal. Previously it was rare for New Zealand’s leaders to speak out publicly on this issue, but in 2021 both Mahuta and Ardern expressed Wellington’s position, which called for respect for international law and freedom of navigation. In her speech to the NZIIA Annual Conference, Ardern said: “We also have serious concerns over the situation in the South China Sea, including artificial island building, continued militarization, and activities which pose risks to freedom of navigation and overflight.” This standpoint was reiterated by Mahuta who spoke to the Foreign Policy Community of Indonesia during her trip to Indonesia in November 2021.

Moreover, on several occasions Ardern has stressed that the China-New Zealand relationship is becoming increasingly complex and that the two are going to take different perspectives on some important issues due to their different histories, worldviews, and political and legal systems. There is no doubt that New Zealand has found it hard to manage the differences effectively. Wellington worries that to raise concerns on issues such as Hong Kong, cyber incidents, and human rights may affect the trade relationship with China. However, it also embraces liberal democratic values. New Zealand will need to consider a trade-off between economic advantages and political gains if the China-U.S. rivalry further escalates.

Challenges to New Zealand’s Foreign Policy

New Zealand’s foreign policy, characterized by multilateralism, is predictable, consistent, and pragmatic, which in the eyes of the government serves the interests of the country. Recent China-U.S. tensions, however, have posed challenges to New Zealand’s foreign policy. New Zealand has tried to be involved in more international and regional organizations, to diversify its trade away from China, and to subtly adjust its policy toward China regarding issues such as the South China Sea. These actions can be seen as responses to these challenges. At present, the Ardern government is still able to manage the differences between China and New Zealand. However, it has realized it is becoming more and more difficult to find a middle ground between China and its Western allies.