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The EU and New Zealand are natural partners

11 March 2019

After a week of discussions in Wellington, Auckland and Christchurch it is quite apparent that New Zealand is beginning to feel the impact of the growing rift between the US and China. For the past 50 years it has been dependent on the US for its security but not for its economic prosperity. That label, once held by the UK, now belongs to China which takes 25% of New Zealand exports or about the same as Australia and the US combined. It is no surprise therefore that New Zealand is looking around for new partners in an increasingly uncertain world. And one partner growing in importance is the European Union (EU).

Until recently New Zealand was able to navigate with ease between the two superpowers. Now as the trade conflict between Washington and Beijing intensifies it is being pressed to choose sides. Last week Patrick Murphy, a senior State department official, was in Wellington re-emphasising the US commitment to New Zealand, ‘a valued Five Eyes partner’. At the same time, he cautioned New Zealand about using Huawei equipment in the country’s 5G roll out citing concerns about the company’s links to the Chinese state. He also cautioned about Chinese behaviour in the South China Sea and its unwillingness to reform its domestic economy, one of the key demands put forward by Donald Trump and EU leaders. 

Wellington shares some of Washington’s concerns about Chinese behaviour in the South China Sea and in New Zealand’s backyard, the South Pacific. In the past couple of years China has offered loans to a number of South Pacific countries, shown an interest in fisheries and seabed mining in the region and even sparked concerns it may be seeking a naval base. Its on-going rivalry with Taiwan, which has diplomatic relations with six micro states in the South Pacific, also spills over into other areas. An Air New Zealand plane bound for Shanghai was recently forced to turn back as its paperwork mentioned Taiwan.

New Zealand cannot afford to antagonise China outright. For a start it is still heavily dependent on the Chinese market. It also benefits from increasing Chinese tourism and students. It is rightly seeking opportunities to work with China when and where it can, such as protecting the South Pacific islands threatened by global warming. At the same time, it must stick to its basic liberal values and stand up for democracy, human rights and the rule of law. New Zealand, however, also finds the US a difficult partner having pulled out of the TPP, the Paris climate change agreement and undermining the WTO. The world views of Trump and Prime Minister Jacinda Ardern are miles apart.

So what can New Zealand do in this tricky situation? The answer is to line up with global partners who share New Zealand’s values such as the EU, Canada, Australia and Japan.

First and foremost is the EU. As Jacinda Ardern said in Brussels ‘there is no better partner than the EU in fighting climate change, defending the rules-based system and promoting peace’. This is why the negotiations for an EU-New Zealand free trade agreement, which both sides aim to conclude by the end of the year, are much more important than just reducing tariffs and opening markets. It offers two partners, albeit of different sizes, the opportunity to work together in an increasingly turbulent world characterised by a return to big power politics. 

Both the EU and New Zealand are working to promote a stronger ASEAN with its 600 million predominantly youthful population and huge growth potential. The EU, like New Zealand, has an expanding network of free trade agreements with Asian countries. Both are involved in the provision of development assistance, the EU in South Asia and the South Pacific, while New Zealand concentrates on its Pacific island neighbours. There is already a number of joint projects and cooperation in the Pacific is set to expand on new infrastructure and issues such as climate change. The EU and New Zealand are also increasing cooperation on non-traditional security threats such as the environmental, cyber, terrorism and nuclear proliferation.

Despite its recent problems, foremost migration and Brexit, support for the EU in all member states has never been higher. On the external front the EU is sticking to the Iran nuclear deal, maintaining sanctions on Russia, formulating a tougher line on China and promoting reform of the WTO. These policies are very much in the interest of New Zealand and show that in an increasingly uncertain world the EU and New Zealand are natural partners. 

Fraser Cameron, Director of the EU-Asia Centre, recently took part in a New Zealand government study tour of EU experts to mark the centenary of World War One.