NZ must hold the line when it comes to the fallout in the relationship between China and Australia


Image: NZ PM Ardern & President Xi of China / NZ Foreign Minister, Nanaia Mahuta


New Zealand must hold the line when it comes to the fallout in the relationship between China and Australia


The announcement over the weekend that Australia, the United Kingdom, and the United States have formed a tri-lateral security partnership that has seen the dumping of a submarine deal between Canberra and Paris should come as no surprise to anyone – but the message should be clear. This is not something for New Zealand to get tied up in as Canberra has now chosen which bed to sleep in. In all reality, relations between China and Australia have been heading in the wrong direction for nearly half a decade and this can be seen in the trade relationship. Its no secret that China has increasingly added harsher controls on Australian imports from wine and lobsters right through to the big end of town around beef and commodities.


Right up until last week China had told a Federal Parliamentary Committee that they would like to see relations improve going so far as to suggest Australia could help it join a Trans-Pacific trading bloc. It noted that the current China – Australia Free Trade Agreement was already a resounding success having eliminated upwards of 95% of tariffs last year alone even though Australia is preparing to take China to the World Trade Organisation over anti-dumping. The tit for tat has begin with the Lowy Institute stating that “Australia-China relations appear caught in a well-charted downward spiral. In the past year alone both countries have lodged complaints against the other with the World Trade Organisation and a freeze on high-level diplomatic relations remains in place. China has slapped tariffs on key Australian exports, while the chattering classes have unhelpfully stoked fears of a regional war.”


And it is the stoking that has a lot of people and Governments across the region. Sitting at the centre of this tit for tat is the relationship between China and the United States – that on again off again love hate relationship that ebbs and flows depending on who occupies the Whitehouse on one side and who presides over Tiananmen Square on the other.


Because, at the end of the day, that’s the real game in town that is playing out not just over the South China Sea or Taiwan, but also when it comes to China’s Belt and Road policy and its arc over supplying financial aid to otherwise vulnerable and developing countries in Asia and Africa – latterly and challengingly for New Zealand – the South Pacific.


The UK has its own challenges with China over the ongoing fate of Hong Kong and throw Australia in the mix with its trade war and its just no surprise that things are turning bad to say the least.

Enter New Zealand. To be frank our traditional allies would probably want us to saddle up to the OK corral but times are different. Militarily our relationship with both the UK and the US has been minimal for some years and its not as if they would come riding to our rescue as we have done in the past for them (World War One and Two for Mother England and Vietnam for the United States). Australia is a tougher question given our close ties, social, culturally, and economically. Hundreds of thousands of Australians and New Zealanders live in each other countries enjoying largely freedom of movement and the Closer Economic Relations deal is our oldest free trade agreement signed nearly forty years ago – but even in that relationship times have changed. Australia has, for some years now, treated New Zealand like a poor cousin from the deportation policy they have stridently enforced right through to the disparity between what citizens can access when it comes to health, education, employment and business. The truth is you’d rather be Australian living in New Zealand as opposed to a New Zealander living in Australia if you were to fall on hard times.


Coming back to what all this tension means for New Zealand – do we need to pick a side? Do we stay out of it and see where the cards fall or do, we embark on a bold strategy of just working in New Zealand’s interests. For me it’s the latter because right now we don’t have to pick a fight with China because they are already very clear where we stand on a myriad of issues from human rights to democracy. As for the relationship between France and Australia – well that also not our fight and to be honest whoever thought it was a good idea to ink a deal worth upwards of $90 million without a binding contract should be sacked anyway.


The truth is as this lot are all fighting over who has the biggest and best submarine, or who controls what in the region, the cost of beef or iron ore, wine or cheese New Zealand needs to just get on with the business of New Zealand. In June 2021, China received 32 percent of New Zealand's total exports, including 44 percent of New Zealand's dairy, 90 percent of logs, and 41 percent of meat, pushing the value of all New Zealand goods exports in the month rose 17 percent year-on-year, Stats NZ said. The UK is New Zealand’s sixth-largest trading partner. Two-way trade was worth nearly NZ$6 billion in 2019. When it comes to Europe Bilateral trade in goods between the two partners equalled €6.4 billion in 2020 whereas trade in services accounted for €3.8 billion in 2019.


What we need to do as a focus is shore up our own bilateral trade relationships and protect New Zealands interests in doing so which is why our trading approach should be to continue to separate trade from the constant security questions enveloping those on both sides of the equation. That doesn’t mean to say we should not stand up to the big nation states on matters of human rights, democracy and more – that’s what foreign affairs and diplomacy is all about. But what we don’t need to do is pick sides – especially when some are behaving like petulant children.


PS – who spends $90 billion on out of date diesel submarines anyway?


Matthew Tukaki is the Chair of the National Maori Authority, former Australian Representative to the United Nations Global Compact and member of the UNGC Board (2009-2013). Matthew was also formerly Chair of the Joint Initiative between the US National Science Foundation and the University of Sydney


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