New Zealand is a small country in the South Pacific Ocean, who's geographical size and population is about the same as that of an average state of the United States. New Zealand has more sheep then people - and a military that is compared with many others, tiny - making it easy to look from the outside and ask: What foreign importance can New Zealnd really have? Analysts from Stratfor a defense and intelligence advisor to top U.S. officials was kind enough to bring such sentiment out from the darkness recently, with the help of Wikileaks of course. Stuff.co.nz had the story, saying that: "When it comes to geopolitical importance," Stratfor analyst Chris Farnham wrote to colleague William Hobart in September last year, "it doesn't get much f---ing lower than New Zealand". I couldn't help reflecting on these comments, hearing that New Zealand Prime Minister John Key was in Seoul for a Nuclear Summit with world leaders. John Key echoed Barack Obama in his speech, with the two men's positions mirrored to the extent they were kind enough to mention each other in their speeches. New Zealand looked like the little brother, following keenly the older sibling in hope of gaining something in return - perhaps a free trade deal? But is that really a symptom of being a small nation like New Zealand is? Is New Zealand a little brother to other nations in the world?
First lets start with as New Zealanders refer to it 'just across the ditch' - translation: over the Tasman Sea - with Australia. New Zealand and Australia are linked by foreign policy in a number of ways that could make the relationship seem to be that of a brothership, but only at first glance. New Zealand and Australia are inclined to mirror each other's strategic interests. New Zealand has its written down in its most recent White Paper that New Zealand would enter a conflict if Australia was attacked. The gesture is returned in the most recent Australian White Paper. New Zealand and Australia have however had a more recent separation in directions when it comes to economic pacts of free trade. When Australia was willing to go with the United States not only to Afghanistan but also Iraq, the United States became inclined to respond with a free trade deal, New Zealand who refused to go to Iraq was not so lucky. But normally the protocol with New Zealand and Australia was that New Zealand would go first, and then Australia would follow when it came to free trade deals. In clear defiance, New Zealand secured a free trade deal with the People's Republic of China - the cross Tasman relationship is yet to take on the same dynamic leaving a seperation in both aspirations and trade deals. As the saying goes, when the Australian economy catches a cold, New Zealand gets the flu, but being that New Zealand is increasingly aware of that as the case - New Zealand is looking beyond Australia more and more. The makes New Zealand less aligned with Australia deal wise beyond Oceania, but also less inclined to see its role as to follow Australia around like a lost little brother.
However, one of the key reasons that New Zealand doesn't look to Australia as a big brother, is that New Zealand already has a free trade deal with Australia. But in saying that that says something about countries that New Zealand doesn't have a free trade deal with. Let me give you an example of what I mean with India. A New Zealand news anchor by the name of Paul Henry made fun of the Indian Delhi Chief Minister Sheila Dikshit on the government television station TVNZ, to the extent that would rather not repeat the remarks here. India was not amused, and within a few days the Indian Minister of Internal Affairs summoned the New Zealand High Commissioner Rupert Holborow. He apologized and made the statement that:“as New Zealand’s High Commissioner to India, I would like to convey my deep regret for the hurt these comments have caused". How much this reflected on existing free trade negotiations between India and New Zealand one can only speculate. However, when New Zealand Prime Minister John Key went to India later on that year, he found the Indian Prime Minister playing hard ball and no free trade. But it's more then that, New Zealand's main export is dairy and meat produce - I have a Chinese friend in Hong Kong who drinks New Zealand milk, it's more expensive she says then other milks, but tastes so much better. Hong Kong seems to exist as a demonstration of what a lack of protectionism looks like: New Zealand milk. But countries like the United States and India are more inclined to want to hold back - they have their own subsidized or noncompetitive farming industries to protect. New Zealand and free trade just doesn't work in many cases, leaving a fiasco to be revealed - particularly when New Zealand considers the dependency it has on free trade, over dealing with its marginal economy at home.
New Zealand currently has a National government focused on fiscal responsibility, which means putting the squeeze on government spending and cutting public sector jobs, as well as services. The sharp reality is that that leaves New Zealand without a plan, and dependent on growth and investment with our trading partners to keep ourselves afloat. A buy of New Zealand farms by Chinese, German and American investors over the last few years are a good demonstration of that. But New Zealand's inclination to look to expanding global markets for their milk and dairy produce are another demonstration - take what has gone on with New Zealand and China since a free trade deal has existed there. A dependency mindset is certainly in existence here, but more then just that - there is a fiasco in the making. If New Zealand hits the brakes and goes into recession - current arguments of fiscal responsibility are going to look like part of the problem, not the solution. That will especially be the case when New Zealanders reflect on tax changes made by their current government. What would likely result? A shake up of internal change, if New Zealand wants growth, it needs to be an innovator - that means new markets and new products - and a focus on investment. For the time being New Zealand has its focus on free trade as its source for growth over investment. There will be less of that in the future with this internal reflection. It might cost New Zealand, but there is always the potentially for it to really pay off. New Zealand for the time being might be a little brother to other countries in the world with the carrot of free trade. But for how much longer? New Zealand cannot sustain its little brother complex with free trade being a wild goose chase.
