NZ-US relations: the factors that bind us
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NZ-US relations: the factors that bind us
24 October 2005
By STEVEN JACOBI
Discussing New Zealand’s relationship with the United States is like that TV ad where a very large bull enters a very fine china shop.
Very quickly, it seems, you get drawn into a debate on US foreign policy or New Zealand’s nuclear-free status.
At another level, there’s no getting past the fact that New Zealand has a key interest in the strongest possible relationship with the United States.
In a pre-election survey undertaken by Business NZ the desire for a free-trade agreement with the United States was listed as the fourth most significant issue for business behind skills shortages, government spending and energy.
With about $8 billion in two-way trade, the US is already our second-largest export destination and fourth-largest source of imports, the third-largest source of tourists and a leading source of foreign investment and technology. Yet the relevance of the US goes beyond these impressive statistics.
At least three factors point to the United States as a future partner of choice for New Zealand’s growing, innovative economy - shared values, complementary resources and our joint commitment to freer trade.
Though much is made of the different approaches our nations have taken to defence in more recent times, both countries have stood together in numerous conflicts and are strong champions for the principles of democracy, human rights and the market economy.
At the resource level there are strong synergies between the two economies.
Whereas the United States is a huge consumer market and proven leader in terms of innovation, technology and entrepreneurship, New Zealand offers a highly skilled labour market, a range of highly competitive natural resource-based industries - agriculture, food processing, biotechnology, forestry and fishing - as well as leading-edge software, telecommunications and creative industries.
All of these provide possibilities for investment and strategic alliances for US and New Zealand partners.
Both countries’ interests align even more closely when it comes to seeking a freer international trading environment whether through the WTO, Apec or in terms of bilateral free-trade agreements.
Beyond these economic linkages there is a whole host of people-to-people contacts in tourism, education - notably through the highly successful Fulbright programme - sport, science and research.
This is the canvas on which the New Zealand United States Council can paint the picture of an already strong relationship that can be developed further for mutual benefit.
Formed in 2001, the council is a non-partisan body funded both by business interests as well as the Government.
The council is not positioned as an advocate for all things American. It is, however, prepared to stand up for the importance of a strong relationship between the two countries.
In doing so it can rely on the assistance of its counterpart organisation in Washington, the US NZ Council, which includes a large number of US corporate and other interests.
The circle of New Zealand friends in Washington has been boosted considerably recently by the establishment of a Friends of New Zealand Caucus in the Congress.
Now the election is over, the time is right for a similar body to be established in our own Parliament.
Some in New Zealand tend to see as the litmus test of the relationship whether New Zealand, like Australia, can negotiate a free-trade agreement with the US.
The council’s strong advocacy of such an agreement is already a matter of record.
The benefits of a trade deal from New Zealand’s perspective are hard to dispute.
While the US market is relatively open for manufactured products, this is not the case for agricultural products. Exports of beef and dairy products are both constrained by import quotas.
Trade Negotiations Minister Jim Sutton has made infamous the restrictions placed on the import of chocolate crumb into the US.
(The annual US quota for New Zealand chocolate is equivalent to eight kingsize Cadbury Dairy Milk blocks, just 2kg.)
The effect of a free-trade agreement goes beyond regulations - it could open up a whole new wave of US commercial interest in New Zealand and ensure that New Zealand is not overlooked for investment in favour of other partners, especially Australia. But the way ahead is not easy.
Defence is cited as an unresolved issue in the relationship but there are equally important matters to do with the size of the New Zealand market for US exporters and the likely opposition to a deal on the part of US agricultural interests.
As the US negotiates a plethora of deals around the world, the queue is becoming very large.
Whether or not an FTA can be achieved, New Zealand’s interest in the US relationship remains.
Now that the new Government has been finalised, the council stands ready to work for a relationship that reflects New Zealand’s values and interests, and contributes to our broader economic goals.
The American baseball player and philosopher Yogi Berra once famously said, "We have a good time together even when we’re not together".
Though the FTA remains the ultimate prize, it is not the only indicator of our closeness. In fact, New Zealand and the US are already more closely together than many New Zealanders and Americans imagine.
Getting the bull out of the china shop will require perseverance and patience but the New Zealand US Council with its network of supporters and friends in both countries is here for the long haul.
Stephen Jacobi is the executive director of the NZ US Council
