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eviewRNovember/December 2012 Vol 37, No 6

CHINA–NEW ZEALAND AT 40 Micronesia South-east Asia

NEW ZEALAND INSTITUTE OF INTERNATIONAL AFFAIRS

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New Zealand International Review1

New Zealand

International

Review

Managing Editor: IAN McGIBBONCorresponding Editors: STEPHEN CHAN (United Kingdom), STEPHEN HOADLEY (Auckland)Book Review Editor: ANTHONY SMITHEditorial Committee: ANDREW WEIRZBICKI (Chair), ROB AYSON, BROOK BARRINGTON, BOB BUNCH, GERALD McGHIE, MALCOLM McKINNON, JOSH MITCHELL, ROB RABEL, SHLINKA SMITH, JOHN SUBRITSKY, ANN TROTTER, JOCELYN WOODLEYPublisher: NEW ZEALAND INSTITUTE OF INTERNATIONAL AFFAIRSTypesetting/Layout: LOVETT GRAPHICSPrinting: THAMES PUBLICATIONS LTD

New Zealand International Review is the bi-monthly publication of the New Zealand Institute of Affairs. (ISBN0110-0262)Address: Room 507, Railway West Wing, Pipitea Campus, Bunny Street, Wellington6011Postal: New Zealand Institute of International Affairs, C/- Victoria University of Wellington, PO Box 600, Wellington 6140Telephone: (04) 463 5356Website: www.vuw.ad.nz/nziia. E-mail: [email protected]: New Zealand $47.00 (incl GST/postage). Overseas $84.00 (Cheques or money orders to be made payable to the New Zealand Institute of International Affairs)

The views expressed in New Zealand International Reviewnon-partisan body concerned only to increase understanding and informal discussion of international affairs, and especially New Zealand’s involvement in them. By permission of the authors the copyright of all articles appearing in New Zealand International Review is held by the New Zealand Institute of International Affairs

2 China and New Zealand at forty: what next? Michael Powles reflects on the evolving Sino-New Zealand relationship and suggests that skill

will be needed in taking advantage of the opportunity it offers.

5 A strengthening China–New Zealand link John Key reflects on the 40 years of diplomatic relations between China and New Zealand and considers possibilities for the future.

8 A cautious start Paul Bellamy reflects on the early years of New Zealand–North Korea relations.

12 Stoking the engine of growth Tim Groser discusses the Trans-Pacific Partnership proposal and New Zealand’s export future.

John Goodman reflects on the experience of the four states of Micronesia in dealing with the problems of modernity.

21 Benign neglect: New Zealand, ASEAN and South-east Asia Andrew Butcher comments on the findings of a recent survey of New Zealanders’ awareness of

ASEAN nations.

24 CONFERENCE REPORT China–New Zealand ties: a timely focus Brian Lynch reports on a symposium held recently in Wellington.

28 BOOKS Mark N. Katz:Leaving Without Losing: The War on Terror after Iraq and Afghanistan (Anthony

Smith). Sanoussi Bilal, Philippe de Lombaerde, and Dianna Tussie: Assymetric Trade Negotiations

(Stephen Hoadley). Jian Yang: The Pacific Islands in China’s Grand Strategy: Small States, Big Games (Michael Powles). Damien Fenton: To Cage the Red Dragon: SEATO and the Defence of Southeast Asia, 1955–

1965 (Mark Pearson).

32 INSTITUTE NOTES

33 INDEX TO VOLUME 37

November/December 2012 Vol 37, No 6

NovDec issue 2012.indd 1 11/10/12 12:35 PM


Achieving a relationship with China as beneficial to New Zealand as the relationship we have today may be one of our most signif-icant overseas achievements. New Zealand leaders tend to high-light the dramatic economic benefit it has brought New Zealand. They could point as well to the contribution ethnic Chinese have made to New Zealand’s growth as a nation and the richness added by Chinese culture.

For their part, Chinese leaders point to New Zealand’s value to China, particularly through the oft-quoted ‘four firsts’, reflect-ing New Zealand’s support for China when it first sought mem-bership of the World Trade Organisation, our recognition of Chi-na’s status as a market economy, our entry into bilateral free trade negotiations and, finally, our being the first developed country to conclude a full free trade agreement with Beijing. And today access to New Zealand’s primary products is clearly important.

But for how long is this mutually advantageous relationship likely to continue?

The world has changed since New Zealand promoted in 1997 China’s membership of the WTO and demonstrated nearly a dec-ade ago that a small Western country could handle a complex free trade negotiation with Beijing. China today is much more inte-grated into global systems and better able than it was to negotiate in its own right variations in the rules to suit its own interests.

Looking ahead, New Zealand will no doubt want to continue benefiting from a co-operative relationship with a prosperous and growing China. But will it still be worth China’s while to co-oper-ate with New Zealand? A more powerful China may have much less need of the kind of small country support it valued so highly a decade and more ago.

When political and international observers first began to notice the developing China/New Zealand relationship, the re-spected Hong Kong columnist Frank Ching, writing in the South China Morning Post in 2006, dubbed the two countries ‘The Odd Couple’.1 To Ching, New Zealand’s support for China’s member-

China and New Zealand at forty: what next?

ship of the WTO was vitally important and led Beijing to agree to begin negotiations on a free trade agreement. Ching commented: No doubt, China appreciates New Zealand’s independent

foreign policy, having ended its alliance with the United States in the 1980s [sic].... Apart from economic relations, China and New Zealand are also developing cultural and ed-ucational ties.... Beijing, it appears, wants to ensure that its excellent relations with New Zealand will be longstanding.

New Zealand will certainly hope so. What we do have is an excel-lent foundation for a continuing relationship. But even a founda-tion as excellent as this one must diminish in lustre as time passes.

Hard work Of course, New Zealand has long been conscious that, as a com-paratively small and inconsequential international player, it has to be prepared to do the hard work in most bilateral relationships. Fighting off irrelevance and gaining favourable attention in major capitals are hard but essential tasks if we are to have any hope of influence.

Today the challenge for New Zealand has escalated. For the whole of its existence since British colonisation, we have been a part, albeit a very small part, of a predominant ‘anglosphere’. This has often made it easy for us to exercise more influence with major English-speaking powers than would normally be possible for a country of our size and power. We could emulate the flea who would whisper in the elephant’s ear, ‘My, how this bridge quakes when we great creatures cross.’ That kind of cozy cultural relation-ship does not exist with today’s rising major power.

The challenge for us now is to devise and pursue new policies based on the solid foundations we have built over the past 40 years. First, there needs to be a major effort to encourage greater knowledge and understanding within New Zealand of China and its culture. Then bilaterally we need new policies, consist-ent with New Zealand’s core national interests and the princi-ples that we have always sought to represent overseas, that can bring more value to our relations with Asia in general and China in particular. Logic would point to these being priority policy is-

Frank Ching

New Zealand has developed an enormously valuable relationship with China, resulting in the only free trade agreement China has concluded with a developed country. But China’s growing global

utation for global independence, particularly as a friend rather than ally of either of the world’s



sues for us at present yet, strangely, there seems little debate about them.

New Zealand does have a long history of strong relations with numbers of Asian countries, in addition to China. Indeed, we have backed the aspirations of the major countries of South-east Asia, in particular, and been a strong supporter of ASEAN since its formation. With some countries what is required is ‘more of the same’. While New Zealand, like Australia, is accustomed to regular policy consultations with the major countries of East Asia, we should consider seeking to increase the frequency and serious-ness of these. Richard Woolcott, former secretary of Australia’s Department of Foreign Affairs and Trade, is reported to have said that Canberra ought to consult Jakarta ‘the way we consult Wash-ington’.2

Traditional imageInstead, according to Terence O’Brien, our 2010 defence white paper reinforces the older traditional last century image of New Zealand as a

diminutive extension of a distant Atlantic-centred world. The White Paper pinpoints the countries of the so-called Anglo-sphere — the United States, United Kingdom, Canada and Australia — as the permanent security partners for this coun-try.

The paper does not address how the former comfortable symmetry between New Zea-

land’s security and prosperity interests is now being conclu-sively changed by the successful advance of East Asia.... It does not propose how New Zealand defence links with East Asian governments might be enhanced as a reflection of im-portant change.

O’Brien suggests there is surely scope for serious pursuit of joint deployment possibilities with Asian partners in order to reflect the region’s increasing importance to New Zealand. He points out that with New Zealand’s forthcoming bid for election to the Secu-rity Council and the significant experience of several Asian powers in UN peacekeeping, joint deployments could valuably be made in the field of UN peace support.3 China today contributes more troops to UN peacekeeping than any other permanent member of the Security Council.

A new ‘first’ for China and New Zealand was created in Ra-rotonga at the time of the recent Pacific Islands Leaders’ Forum when the two governments agreed to jointly sponsor a project with the Cook Islands to construct a new water mains system on Rarotonga. Prime Minister John Key hailed this as ‘an example of how we can work together to get the most benefit from our aid programmes in the Pacific’. China’s willingness to break with

precedent and work co-operatively with another donor will be regarded by many as a significant breakthrough. It will also be tak-en as a sign that while some donor governments, including ones with close relations with New Zealand, are unenthusiastic about China’s aid in the Pacific, New Zealand is happy to be seen to be a partner with China in delivering aid in the region. Perhaps this precedent can be followed in other areas as well.

In the trade and economic field, it will be important that New Zealand continues to support Asian initiatives. Although the cur-rent Trans-Pacific Partnership negotiations do not at the moment include China, Trade Minister Tim Groser supports China’s in-volvement and it will be important New Zealand maintains this position. A regional free trade agreement is also on the agenda for the ASEAN plus Six group, including China (and New Zealand) but not the United States. It would be harmful to New Zealand’s interests if the issue of the appropriate vehicle for regional free trade should be caught up in US/China competition.

Most important, New Zealand has benefited enormously from being seen to be an independent player internationally. It was an important factor in China’s perception of New Zealand as the relationship developed.4 It is hard to imagine China giving such support to a New Zealand which abandoned even the claim to independence in foreign policy. Yet New Zealand today has been described as adopting the status of a ‘de facto ally of the United States’.5 If this were to reach the point, directly or incrementally, that New Zealand was seen by Beijing as supporting a US-led attempt to contain China or curb its rise, our relations with China would obviously be very seriously harmed. Being a friend of both major powers, but taking care not to be seen to be permanently aligned to either, will continue to be crucially important.

Our relationship with Australia, New Zealand’s most impor-tant, requires and deserves special treatment, not least as we define and pursue the New Zealand national interest in relation to Chi-na. The excellent Centre for Strategic Studies discussion paper by Chris Elder and Robert Ayson China’s Rise and New Zealand’s In-terests6 makes the point that it is New Zealand’s relationship with Australia that requires the most careful handling in this regard. The authors suggest ‘considerable finesse’ will be needed. While not spelt out so bluntly, the paper suggests that, in relation to China, New Zealand should continue, but not necessarily allow itself to be limited by, close consultation with Australia.



The CSS paper also discusses the challenge for New Zealand in seeking ‘to manage the competing claims and values of China and the United States’. This, too, will require finesse. For a start, it will be important that we New Zealanders form sensible and rational views of the intentions of China and, for that matter, the United States in our part of the world. Some observers highlight what they believe to be a ‘China threat’ in the Pacific Islands re-gion. Sound and careful assessments of China’s present or likely future intentions are essential in this regard. Books such as Jian Yang’s The Pacific Islands in China’s Grand Strategy: Small States, Big Games, reviewed in this issue, are invaluable in this regard.

Essential requirementMaintaining our credibility in both Washington and Beijing will require both skill and subtlety. Without such credibility, New Zealand will not only have difficulty pursuing its national inter-ests bilaterally with the competing major powers but also not be able to be heard, and have any influence, on the greatest issue of our time: whether these two competing powers will succeed in managing their competition peacefully. Terence O’Brien has spo-ken of the need for New Zealand to be prepared to ‘speak truth to power’ and make the case for a world order that can accommodate both competing powers. Hugh White of the Australian National University argues persuasively that the United States needs to be persuaded to ‘share power’ with China in the Asia–Pacific region. For its part, China shows signs of believing that the United States is in a state of irreversible decline — a view vigorously rebutted in Beijing early in September by Singapore’s Prime Minister Lee Hsien Loong.

The respected former premier of China, Zhu Rongji, once re-

Chris Elder Robert Ayson

marked to the writer that in his view New Zealand had two great advantages in this world: an Asia–Pacific location and the heritage of a great civilisation. To take full advantage of the new opportuni-ties offered by the changed world order, and avoid potentially cat-astrophic pitfalls, will require all the skills and assets we can utilise.

NOTES1. South China Morning Post, 26 Jun 2006.2. The Interpreter, 28 Jul 2012.3. Dominion Post, 26 Jun 2012, and NZ International Review,

vol 37, no 4 (2012).4. See Frank Ching, South China Morning Post, 26 Jun 2006.5. Robert Ayson and David Capie, Asia Pacific Bulletin, no 172,

17 Jul 2012.6. CSS Discussion Paper No 11, 2012.

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Relations between New Zealand and China are very good. We have extremely good trade links, which each year go from strength to strength. Our people are regular visitors to each other’s coun-tries. New Zealand is home to many people who have come here from China. In recent years, New Zealand has had three Chinese members of Parliament — two of them from my own party, the National Party. And our governments meet often and work to-gether effectively.

In 2012, Vice Premier Li described the relationship between our two governments as ‘at its best ever’. It has certainly come a very long way since 1949. That was in the early throes of the Cold War. And New Zealand and China soon found themselves on opposite sides in the conflict in Korea. But in 1972, Richard Nixon made his ground-breaking visit to China. That, on top of the outstanding diplomacy conducted by Henry Kissinger and Zhou Enlai, provided the opportunity for 28 countries, includ-ing New Zealand and Australia, to officially recognise the Beijing government.

New Zealand recognised China in December 1972, estab-lishing the basis for New Zealand’s enduring ‘one China’ policy. Yet even during those early years, from 1949 to 1972, when the country was largely closed to foreigners, a handful of New Zea-landers left their mark on China. The most famous was, of course, Rewi Alley. Alley was a Cantabrian who went to China in 1927 and spent the rest of his life there — a total of 60 years. While working in Shanghai factories and travelling into the interior of the country, he became aware of the plight of ordinary Chinese peasants and workers. During the war against Japan, he helped establish thousands of small co-operative factories. He founded schools. And he was a prolific author and international publicist for the communist government, while continuing to hold a New Zealand passport.

The photographer Brian Brake also visited China, in the late 1950s. His photographs, taken during the period of the Great Leap Forward, form a unique record of a turbulent period. The New Zealand government is supporting Te Papa to tour a collec-tion of Brake photographs from this era, in partnership with the

A strengthening China–New Zealand link

National Museum of China. They will be on display in Beijing at the time of the 40th anniversary.

Relaxed bansThis level of personal engagement by New Zealanders in China was possible in part because the New Zealand government relaxed travel bans against China before many other Western countries. It also relaxed trade bans. In 1956, New Zealand lifted trade em-bargos imposed on China during the Korean War. Wool, tallow, hides and skins were New Zealand’s main exports in those days, but trade flows remained relatively small. Exporters found it dif-ficult linking buyers and sellers across very different economic systems, and connections were limited. In 1972, bilateral trade between New Zealand and China totalled only $1.7 million, and there were no air links between our two countries.

To a New Zealander in 1972, China would have seemed an unknown, mysterious country of close to a billion people. And it is hard to believe New Zealand figured highly in the minds of most Chinese. So much has changed, then, in 40 years. Since the establishment of diplomatic relations, New Zealand and China have developed a broad and substantial relationship that is among New Zealand’s most important. We have different cultures, dif-ferent histories and different political traditions. So we often have a different perspective on things. However, we are able to express our views with openness, honesty and respect.

That is an important indicator of our positive intent over 40 years. Our trade relationship, in particular, has been a huge success, and momentum has grown very quickly in recent years. In part, that is because of China’s ever-increasing importance in the global economy. In 1981, when several pioneering New Zea-

Henry Kissinger Zhou Enlai

The New Zealand–China relationship has come a long way since it was inaugurated in 1972, and is now so warm that Vice Premier Li has described it as ‘at its best ever’. New Zealand and Chi-na have developed broad and substantial ties that are among New Zealand’s most important. Our trade relationship, in particular, has been a huge success, and momentum has grown very quickly in recent years. People-to-people links between New Zealand and China are also strong. New Zealand has also, from time to time, hosted Chinese naval vessels, and works with China in various regional organisations. Looking forward, it is safe to assume that current trends will continue.



land businesses formed the New Zealand China Trade Association, Chi-na accounted for 2.3 per cent of global GDP. By 2011 this had risen to 14.4 per cent. Rapidly rising living standards, increasing urbanisation and a shift to higher-pro-tein diets have supported demand for New Zea-land products.

Hard workBut our booming com-merce is also due to the fact that New Zealand

People-to-people links between New Zealand and China are also strong. Chinese tourism to New Zealand only commenced in earnest at the end of the 1990s but is increasingly significant. Last year Chinese tourist numbers grew by 33 per cent. That number will continue to grow under a new air services agreement that was made earlier this year.

A lot of young Chinese people also come to New Zealand to study. Since the 1990s, China has been New Zealand’s largest education market. New Zealand is today providing a quality ed-ucational experience and pastoral care to around 23,000 Chinese students, and we are aiming to grow that further.

And many Chinese want to stay permanently in New Zea-land, rather than just visiting. China is the second largest source of migrants to New Zealand, behind the United Kingdom. The next census is likely to show a resident population of Chinese in New Zealand of close to 200,000 people. But in relative terms, a greater proportion of New Zealanders actually live in China, rather than vice versa. More than 3000 New Zealanders are living in China, which is not insignificant compared to our total popu-lation of only 4.4 million.

Ship visitsBut the relationship between New Zealand and China is not just about people-to-people and trade relations. From time to time, New Zealand hosts military ship visits from China. We work to-gether in regional organisations such as APEC, and on disaster relief. China was one of several countries to send urban search and rescue teams to assist New Zealand in the immediate aftermath of the Christchurch earthquake, and to donate money for recon-struction. We are very grateful for that assistance.

New Zealand has also aided China after natural disasters, in-cluding the great Sichuan earthquake in 2008. And at the recent Pacific Islands Leaders’ Forum, we announced a new partnership between the Cook Islands, China and New Zealand that will de-liver an improved water mains system in Rarotonga.

This new piece of infrastructure will ensure communities and businesses have access to clean drinking water. It will mean a bet-ter quality of life for the people of the Cook Islands and it will help promote economic growth. The project is the first time New Zealand has worked with China to deliver a major development initiative in the Pacific. It is an example of how we can work to-gether to get the most benefit from our aid programmes in the Pacific.

Brian Brake

and China have worked hard to develop our trade relationship over a number of years. New Zealand was the first country to recognise that China had established a market economy, in 2004. We were the first country to agree bilaterally to China becoming a member of the World Trade Organisation. And in 2008, our two countries signed an historic free trade agreement. Since then, trade between us has grown exponentially.

New Zealand’s goods exports to China have trebled in only four years, and China is now our second-largest export market. Dairy and wood products are the largest export commodities, fol-lowed by meat and wool. New Zealand now exports more than ten times the value of product to China every day than we did in the whole of 1972.

Chinese demand has done much to support the New Zealand economy over the last few years. China is also Australia’s largest export destination, chiefly in mineral resources, providing further indirect benefits for New Zealand, given that Australia is our top trading partner. China is also New Zealand’s biggest source of im-ported goods.

Two-way trade in 2011 totalled $13.3 billion and is rising all the time. Our countries are certainly on track to achieve the goal Premier Wen and I set in 2010, of doubling our trade to $20 billion per annum by 2015.

Our investment relationship with China is much smaller than our trade relationship, but that, too, is growing. China is New Zealand’s eleventh largest investor with $1.8 billion of investment

Chinese visitors to New Zealandin 2011. In particular, Chinese firms have made invest-ments in New Zealand forestry, manufacturing and agri-culture.

Safe havenChina is also investing in New Zealand government bonds, contributing to the record low borrowing rates New Zea-land currently enjoys. New Zealand is seen as a relatively safe haven in these difficult times and Chinese authorities have wanted to diversify their international bond holdings. Recently, there have been some encouraging examples of New Zealand firms investing in China. Fonterra, for ex-ample, has significant plans to increase the number of farms it operates in China, with a roughly NZ$50 million investment per farm. And high-tech firm Rakon opened a US$35 million factory in Chengdu last year.



Continuing trendsLooking forward, it is safe to assume that current trends will con-tinue. The centre of gravity of global economic activity will keep shifting from the Atlantic to the Asia–Pacific region. Europe will remain a vital outlet for some of our highest value exports, but our biggest growing markets will be around the Pacific basin. In that environment, New Zealand has a lot to offer.

We are a reliable, competitive and high-quality source of food. We have technical knowledge and expertise that can help coun-tries in this region develop, build infrastructure and add value to their natural resources. We can deliver a world-class education to the next generation of leaders across Asia and the Pacific. And we are a great place to visit, see wonderful scenery and play a few rounds of golf.

We have lots of things we can sell to other countries, but we also want to see New Zealand businesses forming productive part-nerships with Asian and Pacific businesses across the region. There are many new fields of opportunity for New Zealand businesses and people to explore. To operate successfully in this region over coming decades they will need to have a good understanding of China, and of Asia in general.

In February I launched the NZ Inc China Strategy. The strat-egy is about getting greater efficiency and effectiveness across all government agencies that work in, and with, China. And it is about developing more targeted and cohesive services to help successful businesses develop and grow in China. We want to be transparent about our bilateral interests, and get on with advanc-ing them.

The China Strategy has a strong trade and economic focus. And it has been developed with industry groups, businesses and organisations involved in building New Zealand’s relationship

John Key with Rakon CEO Brent Robinson in Rakon’s Class 1000 clean room on 10 September 2010

The Fonterra Building in Auckland

with China. The strategy sets out ambitious, high-level goals, to-gether with actions to achieve them. The five goals are:

to retain and build a strong, resilient political relationship to double two-way trade to $20 billion by 2015, as I men-

tioned above to grow services trade including education services by 20 per

cent, and grow the value of tourism exports by 60 per cent, all by 2015

to increase investment to reflect our growing commercial re-lationship

and to grow high-quality science and technology collabora-tions with China that generate commercial collaborations.

Important document I am pleased the strategy has been positively received in New Zea-land and in China. It is an important document. Our relationship with China is critical to achieving the government’s aim of build-ing a competitive and more productive economy.

One of the immediate outcomes of the strategy was the for-mation of the New Zealand China Council. The council brings together New Zealanders who are engaged in China from across a whole range of fields, including people in the business, academ-ic, science, cultural and education communities. As the council’s chair, Sir Don McKinnon, put it, the council will operate as an umbrella organisation stretching across the breadth of New Zea-land’s relationship with China, and not leaving anyone in the shade.

This is a significant further step in building on what is already a very strong relationship in many areas. The China Strategy also reinforces the government’s commitment to ministerial engage-ment, both as hosts and visitors to China, to build important re-lationships with China’s leadership.

As prime minister, I made my first official visit to China in 2009, where I met President Hu Jintao and Premier Wen Jiabao. And I am hoping to visit China again later this year, to meet the new Chinese leadership. I also hope to launch the New Zealand China Council’s inaugural Partnership Forum in Beijing.

In my view that would be a fitting way to mark the 40th an-niversary of a significant relationship, which has a proud history and can look forward to an even better future. I am confident that we will continue to see New Zealand’s relationship with China go from strength to strength over the coming years.



Gradual moves to build New Zealand–Democratic People’s Re-public of Korea (North Korea) relations during the 1970s provid-ed the foundations for later diplomatic relations. With increased interaction between the two countries this year, a review of New Zealand’s position and factors shaping the relationship is time-ly. The New Zealand government’s perspective is mainly derived from archival material held by the Ministry of Foreign Affairs and Trade, New Zealand Immigration Service and Security Intelli-gence Service. The activities of the New Zealand–DPRK Society, which promotes relations between the two countries, are also out-lined using material from the society’s archives.1

The 1970s witnessed the promotion of bilateral relations, gen-erally unsuccessfully, by North Korea and some New Zealanders. The North Korean ambassador in China met Associate Minister of Foreign Affairs Joe Walding during his March and October 1973 Chinese visits, though the government was not ‘particularly anxious’ for a proposed North Korean visit to New Zealand to occur.

It was within this context that the decision was made in De-cember 1973 to form a society to ‘further good relations’ between New Zealand and North Korea, inform the public, sponsor visits and ‘try and influence the Government to establish official rela-tions’. With a provisional committee formed, the New Zealand–DPRK Society was established in March 1974. Leading society members included senior academics Wolfgang Rosenberg and William Willmott, along with the Reverend Don Borrie. Borrie’s regular contact with the North had started in 1971, and Rosen-berg visited in the following year. Rosenberg wrote that his impres-sion was ‘of an overwhelming economic success’. Indeed North Korea was ‘one of the most potent sources of optimism for the possibility of a world free from hunger’. With the society hoping to establish branches throughout New Zealand, a Christchurch branch was formed in March 1974, amidst what it claimed was ‘somewhat distorted’ media coverage of this development. A Wel-lington branch followed in September. Influenced by a desire to avoid left-wing ideological splits based on Chinese or Soviet inter-pretations of socialism, the society gave priority to forming a small national network over securing mass membership.

A cautious start

New Zealand–North Korean relations were challenging during the 1970s but provided founda-tions for later diplomatic relations established in 2001. Against the Cold War’s background, New Zealand’s position was primarily shaped by the view that the authoritarian regime’s foreign pol-icy was aggressive and unsophisticated, the priority given to relations with South Korea, and the stance of friends and allies. The New Zealand–DPRK Society played a key role promoting rela-tions between both countries during this period. Bilateral relations continue to be challenging and caution remains important in interacting with the North. However, the need for dialogue fostering mutual trust, transparency, and co-operation is even more important today.

After Pyongyang asked the provisional committee if a delega-tion could be received, Walding said in May 1974 that a private, society-sponsored delegation entering on special travel documents was possible. Four North Koreans duly arrived in Christchurch during July to promote relations with a cultural exhibition. The society and Chinese diplomats met them. Their three-week stay included a visit to Wellington. At the exhibition’s opening, Will-mott said that it marked ‘the very beginning of what we hope will be increasing exchange between us’. He expressed his delight that the visit had occurred so soon after the society’s establishment. The delegation felt their visit went ‘very well’, and Rosenberg called it a ‘great success’. The Ministry of Foreign Affairs called the exhibition ‘very harmless’, the New Zealanders ‘doing all the answering of questions from the few members of the wide-eyed public who strolled in’.

Low-key visit The low-key visit was in line with New Zealand’s cautious ap-proach. Prime Minister Norman Kirk indicated that relations would be opened in due course. New Zealand was gradually moving towards recognising the North at its own pace, and de-veloping contacts with all Asian countries. The Foreign Ministry felt that the visit ‘would be a minor but useful step forward in this process’. Some positive Korean peninsula developments augured well for the future. With Australia establishing diplomatic rela-tions with the North in 1974, there was a feeling that Pyongyang was ‘emerging from its long isolation’.

Don Borrie’s visit to North Korea in 1971



Despite the visit New Zealand remained cautious in its ap-proach. In early 1975 the high commission in Canberra was advised not to ‘actively discourage’ approaches from the North Koreans, but to ‘avoid giving any impression that they might lead to an early relaxation of the Government’s position’. This was be-cause the government intended to ‘hold the North Koreans at arm’s length for some time yet’. During May 1975 the North’s ambassador in Indonesia commented that communist victories in Cambodia and Vietnam meant that the ‘tide’ in Asia was ‘running strongly in the right direction’. Thus, it was ‘high time’ for diplo-matic relations after almost a year’s talks. New Zealand’s embassy in Jakarta responded that it would await the ‘natural course of events’.

A North Korean delegation including student and union rep-resentatives was denied visas in April 1976. Rosenberg informed Pyongyang of this, lamenting that the government was ‘unfor-tunately one of the most backward that has ever been elected’. He told the North Koreans that the government’s decision had received much publicity with media, unions and student organ-isations pressing for its reversal. The society contacted Rewi Al-ley seeking his help in promoting New Zealand–North Korean relations. In May 1976 Rosenberg visited North Korea. ‘It’s an incredibly successful country’, he stated afterwards, declaring that he ‘would prefer not to go to the South after such a good recep-tion by the North’. The following month Borrie and trade union-ist Gordon Walker also visited the North, which announced the establishment of a North Korea–New Zealand Friendship Asso-ciation. This was to ‘acquaint the New Zealanders with the Kore-an question’, so that they understood that Korea ‘must no longer be kept divided’. North Korea also proposed a table tennis team’s visit, a proposal viewed by New Zealand officials as ‘a step in its campaign to hasten recognition’. Likewise, the society sought to organise a table tennis team to visit North Korea.

Cultural delegationGiven the precedent of the 1974 delegation’s low-profile visit, the society hoped that another unofficial visit by a cultural delega-tion would be possible. But an initial attempt to obtain visiting visas failed because the North Koreans used official passports. It was not until August 1978 that a delegation finally arrived. The North Koreans held talks with the New Zealand society that they felt provided an ‘important opportunity to further extend and develop’ relations. They also met with trade unionists and uni-versity academics. With its reported political activities violating government guidelines, the visit was controversial. According to Borrie, the North Koreans followed restrictions placed on them making public statements. Early delegations were friendly and did not wish to ‘rock the

boat’. Hence they were consistently ready to adapt to New Zealand government conditions which denied them the right of freedom of speech and public association, restrictions the media did not understand.

Borrie also observed that it was ‘a challenge for the North Koreans to understand the role played by the Society as a voluntary asso-ciation, it not having the linkages to a State system as practiced by the DPRK’.

During late 1979 a society delegation visiting the North was received by North Korea’s deputy prime minister. In an article published after the visit, the delegation observed that the coun-try’s industrial development was ‘remarkable’, and the degree of equality ‘most impressive’. North Korea was ‘very delighted’ with such coverage.

Member of Parliament Warren Freer after visiting North Korea said there were ‘encouraging’ prospects of trade with the North, and remarked that economic conditions were much better than he had expected. The society also contacted US President Jimmy Carter to ask that the United States sign a peace agreement with North Korea, and withdraw its forces from the peninsula. As the decade ended other groups apparently had been in contact with North Korea too.

Regular applicationsBy 1980 the North was applying almost annually to send dele-gations and non-official groups. In March 1980 the government refused visas for associa-tion members invited by the society, and Minister of Foreign Affairs Brian Talboys refused to meet the society. However, 40 North Koreans were re-corded as visiting New Zealand in 1980, pri-marily for business and holiday/vacation. Borrie met a North Korean del-egation that visited Aus-tralia in April that year. These North Koreans in-dicated they would like to invite MPs Bill Rowling and David Lange to the North, given the Labour Party’s ‘relatively positive

Above and below: Reverend Don Borrie in Pyongyang



stand’ on their country. They looked forward to a New Zea-land trade union group visiting and a society branch in Dunedin being established, and asked for the names of ‘progressive’ mem-bers of Parliament and universi-ty staff. They also sought infor-mation on New Zealand’s wool industry and to obtain vegetable seeds.

Similarly, New Zealanders visited North Korea. According to North Korean sources, Freer visited again during July 1980. Rosenberg visited the North for the Sixth Congress of the Korean Worker’s Party in October 1980. After this visit he said that Pres-ident Kim Il Sung’s position in North Korea, and the ‘respectful reverence’ of him, was not dis-

Entry refused Explaining the refusal to allow three North Koreans entry in early 1976, Acting Minister of Foreign Affairs Sir Keith Holyoake re-ferred to the North’s unwillingness to deal with South Korea and to resume dialogue on peaceful reunification as major causes of peninsula tensions. With such a visit potentially seen as political, and apparently part of the North’s ‘world-wide political effort’ to achieve wider recognition, the government saw ‘no specific advan-tages’ in allowing the visit. Furthermore, North Korea had ‘one of the most authoritarian regimes in the world’, the repression of freedom of speech and worship exceeding that of governments anywhere else in the region. This reference to lack of freedom in-fluencing New Zealand’s position was questioned in the media, given New Zealand’s relationship with South Korea, with its then lack of democracy. According to Holyoake, New Zealand’s atti-tude towards North Korea ‘ultimately depends on that country’s own actions’. If the North ‘demonstrates that it is disposed to play its part as a responsible member of the international community, New Zealand will be happy to establish diplomatic relations’.

North Korea’s diplomacy with New Zealand was viewed by officials as unsophisticated and aggressive. This reinforced nega-tive perceptions and caused frustration. In June 1974 the embassy in Jakarta complained that the North Korean ambassador, who had been ‘very persistent’ in seeking a ‘courtesy call’, did not take the ‘broadest of hints’ that a meeting was not possible. The follow-ing month the ambassador was described as a ‘first-class creep’. In February 1975 the secretary of foreign affairs expressed frustration that North Korea did not understand that New Zealand was ‘not prepared to be bludgeoned into early recognition [of the North]’. Apparently this ‘message’ had ‘not yet got across’ or ‘more likely, we suppose, it is being ignored or misread deliberately’. Later that year the Jakarta embassy compared discussions with the North Korean ambassador to mounting ‘the old treadmill’ where both parties ‘pedalled hard without result’.

Negative perceptions were further encouraged in the late 1970s. In July 1976 New Zealand’s Bangkok embassy was ad-vised of the ‘likely fruitlessness’ of accepting North Korean calls. Moreover, the 1978 North Korean delegation’s reported political

similar to that of the Queen in New Zealand. Furthermore, the North Koreans had ‘shown the world how under-development and poverty can be overcome within one generation’. In New Zealand the society aimed to ‘prod’ the Labour Party and trade unions into making statements on North Korea, while noting that the ‘seduction of tours to North Korea should be held out’.

Tense relationsNew Zealand–North Korea relations were tense after the Korean War and during the Cold War. Some New Zealanders opposed New Zealand’s involvement in the Korean War, and expressed some support for North Korea. They included MP Reverend Clyde Carr and the New Zealand Communist Party. However, New Zealand’s reluctance to build relations with North Korea de-rived primarily from its opposition to the North’s foreign policy. This was particularly because of its peninsula commitments.

During the 1960s concern was expressed over North Korean aggression, such as its raids into the South. In November 1967 Charles Craw, New Zealand’s United Nations’ delegate, asked whether North Korean violations of the armistice were ‘their re-action to the remarkable progress being made in the Republic of Korea [South Korea] or are they the prelude to aggression on a larger scale’. In 1967 and 1968 the North’s attacks across the de-militarised zone were mentioned in Parliament too.

Attacks in the early 1970s caused further concern. The North failed to assassinate South Korean President Park Chung-hee during August 1974 but killed his wife. The in-cident, which occurred after the North Korean delegation ar-rived in New Zealand, induced Kirk to express New Zealand’s ‘deep regret and sympathy’. Prime Minister Rowling in 1975 recognised that the peninsula was a ‘focal point of great-power interest in the region’, and that a ‘state of tension’ existed. There could, in his view, be ‘no real reconciliation’ until North Ko-rea and its closest friends formally acknowledged and accepted the South’s independent existence. During the same year New Zealand’s Jakarta embassy notified Wellington that the North Korean ambassador had said ‘We have no fear of the South Koreans (wide show of Grandma’s big teeth)’.

The June 2012 senior DPRK delegation in New Zealand with friendship society liaison person Karim Dickie



activities in New Zealand, and the South’s accusation that the vis-itors had disguised their status to enter New Zealand, encour-aged the government to refuse visas in March 1980. In November 1981 the ministry noted that the North had conducted a ‘strong diplomatic campaign’ since the late 1960s to gain wider interna-tional recognition and greater support in its competition with the South. However, its diplomacy ‘frequently has been unsophisti-cated, heavy-handed and counter-productive’. This was noted in other countries too. A US official that year said the North Kore-ans were ‘their own worst enemies and usually manage to shoot themselves in the foot pretty quickly’.

UN pressureThe North’s moves to change New Zealand’s policy on Korea at the United Nations caused more criticism. In October 1975, the North’s ambassador in Jakarta requested that New Zealand be ‘ab-sent’ at UN resolutions on Korea. When New Zealand’s embassy identified ‘hurdles’, the ambassador merely ‘cleared them nimbly or (more usually) booted them out of the way’. Later that month another request to ‘abstain’ or be ‘absent’ at UN resolutions on Korea had ‘unpleasant undertones’. North Korea told the Jakarta embassy that ‘since the former reactionary government which sent New Zealand forces into Korea had been toppled by the Labour Party we had hoped you would be more understanding of the aspirations of the Korean people’.

Nor was government sympathy likely to be generated by some moves by Pyongyang and supporters in New Zealand. Delega-tions were expected to cover international travel costs by selling cultural and art items. Borrie found delegations ‘very friendly and cooperative’. However, the items shown reflected the North’s ide-ology rather than being consumer-driven, leading to poor sales. Delegation press conferences were called ‘very doctrinarian’ and ‘very long’ in the media.

Similarly, North Korean printed material received by New Zealand’s embassy in Seoul was deemed not very interesting or useful. Indeed, the society told the North not only that ‘too much material’ was sent abroad but also that it was ‘not appropriate to the New Zealand public’. This was because New Zealanders reacted negatively to the focus on Kim Il Sung as they believed such material reflected a ‘personality cult’. Both the North and the New Zealand society criticised the New Zealand government and the South. The Communist Party was also critical of the gov-ernment’s position. It condemned New Zealand’s refusal to allow delegation visits while having exchanges with the ‘pro-US fascist regime in South Korea’.

Major factorThe South Korean position was a major factor shaping policy. There were some negative perceptions of South Korea in New Zealand, and serious misgivings were expressed over its periods of authoritarianism and political upheaval. Even so, relations grew closer from the early 1960s. In indicating that a gradual opening of New Zealand–North Korean ties was sought, Norman Kirk noted that the decision to establish diplomatic relations would be influenced by consultation with other interested countries, in-cluding South Korea. The ministry felt that an ‘adverse reaction’ from the South was possible over the 1974 visit. However, Seoul was ‘well aware’ of moves towards establishing relations ‘at a suita-ble time and not at the expense of our long-standing relationship with the South’. Prime Minister Robert Muldoon also gave prior-

ity to maintaining close relations with the South. Finally, New Zealand policy was influenced by its friends

and allies such as the United States and Australia. Here Austral-ia’s experiences were especially relevant. The South, along with the United States and Japan, had been unhappy with Australia establishing diplomatic relations with the North. However, the North in October 1975 abruptly withdrew its diplomats (after a North Korean had crashed an embassy car outside the South Ko-rean ambassador’s residence and fled) and issued a note labelled insulting by the Australian government. South Korea had been ‘grateful’ for New Zealand’s decision not to follow Australia when it opened negotiations with the North. Moreover, New Zealand was conscious of illegal activities by North Korean diplomats. For instance, in 1976 the North’s diplomats were forced to leave three Scandinavian countries and Finland after revelations of illegal to-bacco, alcohol and drug dealings. It was also reported in New Zealand that North Korea could not pay its debts to other coun-tries, and might be bankrupt.

Challenging yearsThe early years of New Zealand–North Korean relations, as with later relations, were challenging. Against the Cold War’s back-ground, the New Zealand position was primarily shaped by the view that the Pyongyang regime’s foreign policy was aggressive and unsophisticated, the priority given to relations with South Korea, and the stance of friends and allies. Despite this, the 1970s moves built ties that provided the foundations for the establishment of diplomatic relations in 2001. The New Zealand friendship society played a significant role in promoting relations, and continues to do so. Although New Zealand’s position on North Korean offi-cials visiting is now more relaxed, challenges to strengthening re-lations reminiscent of those influential in the 1970s remain. Here concerns over North Korea’s foreign policy and very poor human rights record that are shared with friends and allies, along with the continuing importance of New Zealand–South Korean relations, are influential. Current relations are further complicated by the North’s nuclear weapons programme and its leadership transition during a period of severe economic challenges.

The North under Kim Jong Un has yet to show strong indica-tions of fundamental change in foreign policy that would facilitate stronger bilateral relations, and caution remains important. How-ever, there have been some positive developments with an apparent desire by the North, assisted by the society, actively to seek closer relations. For instance, in June 2012 a visiting senior North Kore-an delegation indicated that it sought a better relationship, espe-cially in education, cultural and economic fields. The delegation was especially interested in New Zealand’s agricultural technology. New Zealand’s ambassador in Seoul, who is cross-accredited to the North, also presented his credentials in Pyongyang in September. Overall, constructive communication and interaction with North Korea was important in the 1970s in helping to build the foun-dations for a diplomatic relationship. The need for dialogue fos-tering mutual trust, transparency, and co-operation is even more important today with a nuclear-capable country operating within an increasingly inter-connected global community.

NOTE1. See also Paul Bellamy, ‘A reluctant friend — New Zealand’s

relationship with North Korea 1973–1989’, New Zealand Journal of Asian Studies, vol 14, no 1 (2012).



Let me begin with a small reflective tribute to the late Sir Frank Holmes, an absolute stalwart of the Pacific Economic Coopera-tion Council. This must be the first formal or informal PECC meeting I have attended in the last 30 years without Sir Frank being an integral part of the discussion.

Sir Frank, who passed away only recently, was a considerable intellectual influence on me and no doubt many people of my generation interested in international trade. He wrote some of the first applied economics papers I read, often in conjunction with Professor Peter Lloyd for the New Zealand Institute of Economic Research.

Like other international economists of the time — I am thinking of Richard Lipsey, Max Corden and others — Holmes and Lloyd took the theory of the second-best, out of sophisti-cated game theory literature, and applied it in their case to New Zealand’s circumstances of the 1960s and 1970s. Put simply, this thinking hugely influenced the design and policy rationale of New Zealand’s first ever genuine free trade agreement — the CER agreement.

That first comprehensive free trade agreement, finally ratified in 1983, had in turn a huge impact on policy thinking on free trade agreements around the world. It was literally the ‘gold standard’ of free trade agreements of its day. To say ‘of its day’ is probably un-

Stoking the engine of growth

nership proposal and New Zealand’s export future.

Hon Tim Groser is the minister of trade. This article is the edited text of an

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nouncing in June on behalf of New Zealand, Australia, the Unit-ed States and all existing TPP members that I had signed a formal letter inviting the government of Mexico to join the TPP. I also sent a similar letter to the Canadian trade minister.

The TPP is deeply influenced by the same political economy thinking underwriting CER. In other words, public policy ideas advanced decades ago by the two intellectuals Frank Holmes and Peter Lloyd continue to influence real world events such as this. It is a remarkable testimony to Keynes’s point about the persistent tendency of so-called ‘practical men’ to under-estimate the power of ideas.

Before elaborating on the TPP and the significance of Mexico’s and Canada’s entry into the negotiation, I want to restate some basic truths about trade liberalisation, the jobs it creates, the pro-ductivity and innovation it leads to and the new markets it opens up.

I started with high-level game theory. Now let me go straight to the coalface to make the same point. In June I visited a very small New Zealand export company in Hamilton that has abso-lutely nothing to do with New Zealand’s core resource strengths in the primary sector. It is called Proform Plastics. It is an au-tomotive parts company that arose out of the ashes of the old import licensing system and is now overwhelmingly export-ori-ented, having successfully got itself into the global supply chain of a couple of major international automotive companies.

Proform employs about 120 local people in design, adminis-tration and manufacturing. It manufactures everything on site, but often using imported materials, and wins contracts on the quality of its product offering, its service and IP package — it

Sir Frank Holmes Professor Peter Lloyd

derstating its influence; fun-damental design principles like progressive liberalisation over many years to deal with sensitivities, comprehensive product coverage, carefully designed review clauses and so forth continue to be valid and to influence Australian and New Zealand negotiat-ing approaches 30 years on.

Because New Zealand is the legal ‘depository’ or ‘ad-ministrator’ of the Trans-Pa-cific Partnership negotiation, I had the privilege of an-

Tim Groser



is not just competing on price. As is the case for most successful things New Zealand does from dairy through to tourism, if it is ‘cheap’ you want, do not come to New Zealand. If you want ‘best value’, then come right in.

Proform is constantly innovating its highly specialised product range on a Kaizen, or ‘continuous improvement’, basis — as any company which is involved in exports must. Trade and innova-tion are joined at the hip. Being a niche player, this company is also proud of its ability to customise its products for the specific needs of its customers. It is in that sense typical of the new genera-tion of export companies that I visit and which give me long-term confidence in this country’s future.

Major opportunitiesAustralia is their major market, but their people told me that they see major opportunities in three markets — the Thailand, Chi-na and, intriguingly, Mexico. They told me that without the free trade agreements we have with China and Thailand, it would have been impossible for them to compete in those markets and em-ploy as many people as they do.

Mexico, they said, was a challenge because of an 18 per cent tariff on the components they make. In fact they said that from their company’s point of view, a free trade agreement with Mexico (given automotive assembly there and high tariffs on components) would be more interesting to them than a free trade agreement with the United States. Given the sensitivity of the impending announcement, I was not then in a position to say ‘well, if a free trade agreement with Mexico is what you want, you have come to the right place!’ I could repeat this story with 853 other examples. Why such a precise number? Because the Ministry of Foreign Af-fairs and Trade and New Zealand Trade and Enterprise surveyed 854 New Zealand export companies in late 2009 to assess the impact of free trade agreements on their companies.

Over 75 per cent of our export companies saw positive in-creases (some substantial) in their business profitability from the removal of these barriers in several of our trade agreements. Just remember this simple reality: the managers who run these export companies do not offer jobs to other people because they want to lose money on their investment of time and capital. They employ more people because they see an opportunity to build a larger and hopefully more profitable business. Profitable New Zealand export companies means jobs. And usually, jobs in the export sec-tor are better paid jobs. The more foreign exchange our exporters earn, the less money we have to borrow from overseas. If I may make a political aside here: it is extraordinary that the people who complain the loudest about foreign investment are the same peo-ple who vociferously oppose trade agreements. It is completely inconsistent.

Clear evidenceOther more sophisticated findings from this large survey of 854 exporters include clear evidence that removal of barriers to trade helped these kiwi companies acquire new knowledge and technol-ogy. Most intriguingly, 42 per cent of companies surveyed saw the lower prices of inputs in the New Zealand market as a result of lowering our own barriers was a real benefit to them.

The last point — that increased competition in the New Zealand market helped our exporters — is, of course, complete-ly unremarkable to the 99 per cent of economists who buy the underlying theory set behind international trade, the theory of

‘comparative advantage’. But we all know this is counter-intuitive to the public of most countries that are in favour of exports and believe imports costs jobs.

So let me approach this from a broader perspective on the ba-sis of an outstanding synthesis of international research produced by the OECD called Policy Priorities for International Trade and Jobs. This was the centre-piece for this year’s annual OECD min-isterial meeting in Paris.

Among the numerous findings of this comprehensive study is a range of practical, anecdotal and econometric estimations. For reasons I will not delve into here I am not a great believer in the value of econometric modelling of gains for trade — there is a persistent tendency of such measures to understate the gains from trade. Having said that, it is notable that OECD modelling sug-gests that a 50 per cent reduction in tariffs and non-tariff meas-ures on a most favoured nation basis for G20 countries would increase New Zealand’s real income by over 8 per cent. Very tidy, even if this is an understatement.

Remarkable statisticMore specifically, I would like to draw attention to one remarka-ble statistic: the share of imported components in manufactured exports has gone from an average of 20 per cent globally to 40 per

A retractable truck bed cover made by Proform Plastics of Hamilton

Pascal Lamy (right) with Speaker of Parliament Lockwood Smith during his visit to New Zealand in 2009



cent in only twenty years. As Pascal Lamy, the WTO’s director-general, said on a panel that I was also on in Paris, that figure is almost cer-tainly out of date already and the true figure is probably over 50 per cent.

It turns out that protectionism is even dumber than we thought. The implication is that if you want to remain competitive in world manufacturing exports and be part of the global value chain, you must ensure your manufacturers can access world-class inputs at competitive prices. If not, you are going to see your manufacturers fall out of the global value

tries this is associated with far stronger productivity growth. On average, an increase of 10 percentage points — the aim of this government — has histori-cally been associated with an average 4 per cent increase in output per work-ing-age person.

A principal transmission mechanism is productivity. Depending on the coun-try, a 10 percentage increase will lead to an average increase between about 2 and 10 per cent in long-term labour produc-tivity. That is the key to higher wages.

chain. My tiny Hamilton example — Proform Plastics — could never have exported its automotive parts into the global value chain if its imported inputs were still subject to high tariffs and import licensing because an earlier generation of New Zealanders thought we should protect everything in the name of ‘jobs’.

If we want to drill down even deeper we can make the same point with respect to liberalising trade in services. OECD research indicates that a one percentage point higher services import share is associated with a 0.3 per cent higher export share. For high-tech business it is much higher.

The boundaries between being a ‘manufacturer’ or a ‘services’ exporter are increasingly porous. So if you want to help your man-ufacturing exporters, they need access to the most competitive services, which are increasingly deeply enmeshed into their prod-uct offering — think again of my guys in Hamilton or numerous other and far larger New Zealand exporters I could have used to make the point.

Positive linksThis joint piece of work that I am referencing by the OECD, the WTO, UNCTAD, and the ILO is a mine of information about the strong positive links between trade, growth and jobs. It is not just about rich, developed countries. The research suggests, for ex-ample, that in sub-Saharan Africa a one percentage point increase in the ratio of trade to GDP is associated with a short run increase in their growth rate of approximately 0.5 per cent per annum, which grows to nearly 0.8 per cent after ten years.

And it applies to New Zealand. That is why we have set this ambitious goal of increasing the ratio of our exports from 30 to 40 per cent of GDP by 2025. We know that for OECD coun-

Trade also deepens physical and human capital.The mass of evidence in favour of open trade is so strong that

the OECD caustically concludes as follows: Despite all the debate about whether openness [on trade]

contributes to growth, if the issue were truly one warranting nothing but agnosticism, we should expect at east some of the estimates to be negative.... The uniformly positive esti-mates suggest that the relevant terms of the debate by now should be about the size of the positive influence of openness on growth... rather than about whether increased levels of trade relative to GDP have a positive effect on productivity and growth.

Safety netsIncreased openness to trade is not some magic wand, of course. We still need well-designed safety nets, well designed labour mar-kets, education systems that work for people with low skills and often low expectations. Trade policy cannot solve these problems.

However, even here, trade can help. Although the evidence is not as conclusive as it is with respect to growth, the ILO research quoted in the OECD study is quite clear on, for example, the relationship between trade and working conditions. Despite all the allegations around the so-called ‘race to the bottom’, the evi-dence suggests the opposite: open trade has a positive relationship with working conditions in developing countries. As the study concludes: ‘Indeed the positive effect of trade on investment and incomes carries with it important implications for reduced child labour, reduced workplace injuries, and informality, while offer-ing new opportunities for female entrepreneurs’.

For our country, the last 35 years have seen a struggle to have

Leaders of TPP member states and prospective member states on the sidelines of the APEC summit in Yokohama, Japan, 11 November 2010

access to markets, as we have gone through a wrenching adjustment process from an economic mo-no-culture (we were an offshore farm for Britain) to developing these platforms into the emerging economies.

And we are making progress. Nearly 50 per cent of New Zealand exports are now covered by free trade agreements from our earliest with Australia through to the most recent free trade agreement with Hong Kong. Obviously there are a variety of other factors influencing the rate of growth of our exports than just these free trade agreements. Never-



theless it is striking that if we just look at the last four years, the cu-mulative growth of New Zealand exports to countries that we do not have a free trade agreement with is a tiny 3 per cent — that is 3 per cent over the four-year period, not 3 per cent per annum.

Worst recessionThis is not entirely surprising — we went through the worst reces-sion in 70 years in 2009 and many of the major developed economies are a bit below or only a bit above the real GDP levels they enjoyed in 2008. But contrast that anaemic growth of our exports to non-free trade agreement countries with the growth of New Zealand exports to

Bill English

countries with which we have free trade agreements. For these countries, our exports in the last four years grew 23 per cent, or nearly eight times as much as exports to our non-free trade agree-ment markets. In the case of China the growth of our exports is simply spectacular — 160 per cent — and the growth of imports from New Zealand is far faster than the growth of imports into China from all sources.

I am as committed to the WTO and the multilateral trading system as any New Zealander — I spent eleven years of my life in Geneva on the GATT and WTO. It remains my firm view that the international community will have to come back to Geneva at some point and find a way forward. It is inconceivable that what was agreed in 1994 at the conclusion of the Uruguay Round — I was our chief negotiator — could forever represent the high wa-termark of political achievement. You cannot have a global supply chain without a vibrant global set of rules and commitments that keep pace with structural change.

Right now I cannot see a way forward, but what a Plan B New Zealand is cooking up through our free trade agreements and the TPP. I will leave aside here a range of other free trade agreements we are trying to move forward, such as Taiwan, India, Russia and Korea, and focus on the TPP.

The TPP has a long period of political gestation. It started life as ‘P2’ — a bilateral free trade agreement between New Zealand and Singapore with precisely this strategic objective, to act in ef-

the TPP — as nine countries. In the near future, this will become eleven, as we move to include Canada and Mexico. Where Japan now goes is suddenly the next frontier issue. And New Zealand, I repeat, is the ‘depository’ of the agreement — because of this negotiation history.

Three changesIt is worth pointing out that this slow evolution encompasses three changes in the election cycle of New Zealand. Our external trading interests do not change with a change in government, and history shows that a core New Zealand advantage is that the two major political parties have successfully quarantined trade policy from the normal democratic arm wrestle. It is a huge strategic advantage.

In this very sophisticated international game, the only thing this tiny country of ours has to sell is smart strategy implemented by a team of deeply experienced New Zealanders, each of whom has extraordinary personal networks to draw on.

The TPP is now the centre-piece of trade strategy of the Unit-ed States. Yes, we are in a process of transition of power to the emerging economies, led by China. But the United States is still the pre-eminent power and is using the TPP to try to develop a 21st century, gold-standard trade agreement that can act as a broader template for trade and investment integration in the Asia–Pacific region.

Reflect for a moment on the phrase ‘integration in the Asia– Pacific’. When we look at the relatively poor export performance of New Zealand over the last 30 years and compare this perfor-mance with other small developed economies (defined as less than 20 million people), what emerges is quite interesting. There are twenty such countries in the OECD, and only three of them are not located in Europe. Because these sixteen countries, all of which perform markedly better than New Zealand in terms of exports to GDP, are close to large, wealthy markets, it is clear that their close regional integration has, at least up to now, been ex-tremely helpful to their export performance.

We cannot shift our geography, just our mentality, our policies and our performance. And our region is the Asia–Pacific. If the TPP is the key instrument to closer regional integration, you can see at least intuitively that this has got to be helpful in the long term.

Finance ministers at the APEC meeting in Honolulu in November 2011 took the opportunity to discuss the TPP

fect as a bridge to a trans-Pacific trade agreement (we envisaged five initial countries). Then, just prior to completion of that free trade agreement and at APEC in Auckland 1999 we hammered out in principle an agreement to negotiate ‘P3’ (Singapore, New Zealand, Chile); Brunei joined and the negotiation of what be-came P4 (or Pacific Four) was completed in 2004 and ratified in 2005.

Since 2010, we have been negotiating the next iteration —



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in the Nuclear Age 1945–1990, 400pp2007 W

Status 1907–1945, 208pp

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World,197pp2010 Brian Lynch (ed), Celebrating 75 Years, 2 vols, 239, 293pp2011 Brian Lynch (ed), Africa, A Continent on the Move, 173pp2011 Brian Lynch and Graeme Hassall (cds), Resilience in the

2012 Brian Lynch (ed), The Arab Spring, Its Origins, Implications and Outlook, l43pp

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Enormous momentumThe TPP now has enormous momentum. TPP leaders agreed in Honolulu in November — New Zealand was led by Deputy Prime Minister Bill English since it was in the middle of our general elec-tion campaign — on a set of very high benchmarks, including elim-ination of all tariffs. There is no point in pretending that you are creating a ‘21st century, gold-standard trade agreement’ if you do not deal with the detritus of 20th century trade barriers — tariffs. The market has moved on. It would be like trying to sell a 1997 Palm Pilot to a Californian digital native. You will not make the sale.

Make no mistake about it. This is going to challenge a num-ber of the participants, especially on their most sensitive agriculture sectors, but if this is not to end as a farce it is something they are going to have to do. At the same time, since dairy lies at the heart of some of the most politically sensitive issues (the economics are quite another matter), we and Australia have said we can be very, very patient to get to the right place.

Once again, our reference point is the design of CER: slow, pro-gressive liberalisation of the most sensitive areas. Time is not the essential point: it is getting to the right long-term result that actually matters.

Sensitive issuesWill it work? Well, that depends on the quality of political deci-sion-making in the countries concerned. There are sensitive issues

for every country. Senior ministers, led by the prime minister, are deeply involved in monitoring the progress of this negotiation. We have professionally identified the key risks, we have risk-man-agement strategies in place and we have among the best negotia-tors in the world to manage the process.

None of the hard issues have yet filtered up to the political level. Of course, I spend a good deal of time batting back constant attempts to destroy the negotiations by anti-trade activists who certainly know what they are doing. They have never seen a trade agreement they have liked and never will.

It will not work, of course. We decided politically 30 years ago as a country that we had to find new markets and there is broad-based political understanding of the importance of this agenda to our country’s future. The TPP is a tremendous opportunity for New Zealand and I am confident we can manage the risks professionally. I have no doubt that the deep concern about the Eurozone is feeding into the TPP debate in a positive way. This is the reason Canada and Mexico felt they had to be in the process.

Austerity alone is not politically sustainable. All countries need a growth story too, even though there is widespread understand-ing amongst the public of the need for prudent economic man-agement. Trade is the engine of growth; the Asia–Pacific region is going to be the centre of growth and opportunity over the next ten years. I think we are in a good space and with the addition of Mexico and Canada it is getting very, very interesting.



The Pacific is a place of big numbers — a third of the Earth’s sur-face, largest economic zones, deepest submarine trenches, biggest environmental marine parks.... Everything is enormous except the land, much like the map of Lewis Carroll’s Bellman, which the snark-hunting crew was very much pleased to see showed only the sea and no land.

The four states of Micronesia stretch across an area the size of the continental United States in the North Pacific but are in fact microstates — atolls and atoll formations of various types. The Federated States of Micronesia (FSM) are high forest-covered mountain atolls, the Marshalls more than a thousand sunken vol-cano craters where only the coral reefs rise above water, much like Kiribati, nineteen such atolls close to the Equator. Populations are also relatively small (although they are far from the smallest in the Pacific, as their leaders gently remind us from time to time: FSM and Kiribati are over the hundred thousand mark, as are the Marshalls if their US diaspora is included.)

For all this, there has been significant competition for them over two or more hundred years: Spain, Germany Britain, Japan and most recently the United States — all have vigorously sought control or political influence there. With the rise of China, a new

States of mind: Micronesia and the

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the great powers over several hundred years, gained their independence relatively recently — a process vigorously supported by New Zealand. The islands remain relatively under-developed — and their inhabitants have tended to resist change that may affect their values or life style. In a harsh environment, the need endures for subsistence and for subsistence culture. Individualism runs counter to the root norms that have made subsistence such an outstanding success story in these islands.

chapter in this saga may be in preparation.New Zealand has played a role too. When Micronesians

gained their independence, part of the final wave of United Na-tions-sponsored decolonisation, New Zealand vigorously sup-ported their efforts against the then colonial powers. And ever since, New Zealand has been in active caucus with these islands: during law of the sea negotiations; with the Marshall Islands at times on anti-nuclear policies; with Palau on marine environmen-tal preservation and with all, today, on climate change.

Yet, after centuries of contact with the West, the islands may seem only lightly developed, if at all. Foreign aid as proportion of national budgets remains stubbornly high. How has this hap-pened? What are the reasons? How does it all seem on the ground? Big questions: I can only try to provide impressions based on ex-perience.

Windy departureI left from Wellington on a windy day — thus begin the memoirs of all diplomats — and crossed to Brisbane to join the Air Nauru flight to Tarawa. The Pacific sky is immense — towering clouds like whole South Americas spiral over inky-blue seas, white-laced waves running sheer across to San Francisco. The mid-ocean atoll bursts onto this scene, as an old priest once said, like a star, an un-real image of iridescent blue, light green, emerald and adamantine ringed by bands of brilliant white sand and green palms with a final strip of grey rock and foaming surf scrumming and steaming into the air. Charles Darwin, son of another cleric, reminds us

Kiribati



things have lasted thus for millennia, the atoll crest ten feet above the surf, the ocean floor a mere 20,000 feet below.

‘Not sustainable,’ says an aid expert sitting beside me — I no longer recall which institution he was from. He got two weeks or two months on the main-island. He has views on everything: the inadequacy of government statistics, twenty years out of date, he says; questionnaires, they do not receive them; overseas travel, senior people travel away all the time; reports and training, we do a lot but there is no change; there is no investment in infra-structure... government is too big anyway, too little private sector, 80 per cent unemployment yet there are dance fests every night. The expert shrugs. He resumes reading an economic weekly — a special issue showing how globalisation has flattened the world to a single, free-market culture.

Globalisation has been washing over the atoll countries a long time — two to four thousand years if you count from when the migratory outriggers left East Asia, two hundred if you mean the Europeans. Whalers and traders visited in the early 19th century. Late in the century, piqued by the German presence in the Pacif-ic, the British annexed Kiribati and stayed until 1979, following a civilising mission and — with Australia and New Zealand —mining rich phosphate deposits on Ocean Island. Nowadays the phosphate is exhausted and Britain has gone to meet other stra-tegic imperatives. But phosphate royalties paid the colony were well invested in the Kiribati Trust Fund, a sovereign fund based in New York. By the time I arrived on-island, it stood at half a billion dollars. Despite periodic global crashes, average returns seemed good, preserving capital and providing a revenue stream for gov-ernment (about a quarter of their annual budget). Not every Pa-cific island has done so well with its mineral assets.

Fishing bonanzaThe remaining budget is met mainly by foreign fishing licenc-es and remittances. Licences allow fishing in the vast exclusive economic zones by foreign vessels — Japanese, Korean, Chinese, Filipino, New Zealand... and the Spanish. The total issuance is worth $30 million in any good year, especially, an El Niño one, which draws fish up to tropical currents and away from those pesky southern waters. It is an ill wind that blows nobody any good. Remittances produce another $10 to 15 million from expa-triate workers in Australia, New Zealand and elsewhere, including crew plying ships from Hamburg to Valparaiso and everywhere in between.

Finally, the government receives foreign aid, with which it tries to cover capital projects such as water supply and power gen-eration plants. Aid — mainly from Japan, the European Union, China/Taiwan, Australia and New Zealand — has been roughly sufficient to double the national budget since the British left.

All this does not make a high national income — around US$1500 per annum per capita. Nevertheless, on the main is-land at least, a kind of recognisably modern consumerist society has sprung up: paid jobs (mainly in government), the parliament (manga-ni maungatapu), tertiary training institutions, aviation, foreign vessels and shipping, small shops, colour steel roofs, heavy road traffic and youth violence. Among the leafy palms, tiny fif-ties-style kiosks now sell packaged food, sweets and flour. Village dairies have glass-front fridges where they store beer, a dollar a can, alongside vegetables brought in by international shipping: apples, oranges, carrots, pumpkin, caulis and cabbage, although these rapidly lose their crisp. Small video shops have sprung up.

CDs, boom boxes and digital cameras are common as are high amp 160-watt public sound systems at dance fests. Recently, Chi-nese business folk have put up ‘department stores’, steel girder barns piled with packaged food, biscuits, beef jerky, plastic bowls, party lights and decorations, electric fans, and, out in front, rows of small-size shiny red Chinese motorbikes. And there is a shop selling airlifted salami, asparagus and lettuces....

Semi-modernisation impactSemi-modernisation has altered tastes and life style. Tinned beef and (even) tuna, rice, flour have replaced much of the healthy, if dull, local diet of fresh fish, coconut fibre and babai. Beer is dis-placing toddy. Kava, which is non-traditional there, is also mak-ing inroads. People live longer (longevity is up to 55 or so) but now also contend with modern Western scourges such as diabe-tes, obesity and amputations from diet — and from the high road accident rates. Cars, vans and motor bikes choke the single island road. A few small bars and night clubs have started up but drink-ing can go on any time, any place. Absenteeism from drinking is rife. There can be quite a bit of trash and some petty gang activity.

Many i-Kiribati have now had experience of other countries from travel abroad for work or study. Returnees tend to be pro-foundly altered by the encounter with Western society.

And post-independence, the government has to project its own international profile, or at least a regional one, albeit with slender resources and extensive aid. Nowadays, politicians and elite officials travel frequently to international conferences: fish-eries, whaling, the environment and conservation, health epi-demics, measures against money laundering and terrorism, law enforcement and shared approaches on telecommunications, transport, shipping and aviation under the Pacific Islands Forum as well as aid projects. New Zealand’s diplomatic relations with Micronesia concern all these subjects, so my computer screen was fully charged with them too. If the small island states were not so deeply involved, they could be an Achilles heel for Australia and New Zealand.

Outer islandsAt first sight, life on the main island offers strong contrasts with the outer islands. ‘The Pacific is not a place; it’s a state of mind,’ he says reflectively. The president likes to say this from time to time when I am in his company on visits to the outer islands though I am never sure what it means. This seems to be one of the reasons he likes to say it.

We are standing in a stiff breeze on a grassy knoll, beside the

A Micronesian sailing canoe made from traditional materials



glittery sheen of a lagoon, deep in the outer islands, two or three hours in a small plane and half a dozen atolls south of Tarawa. I look across scudding waves to a bleak coral reef, and beyond, to a vast ocean swell rising from the South Pacific. Landwards, there is no sign of life: no kiosks, government departments, bikes or trucks, no one out walking and not a craft on the water or shore, no rubbish. The island looks empty.

‘No fishing today,’ says the president. ‘They can’t get out in these conditions.’ These conditions may last for days. Fishermen cannot get out as often as you might think — no criticism of their skills, which are superb. Experienced seamen can and do sail by the ocean currents, and at night, by the stars and sense of smell alone — each atoll has a different smell. But even in good condi-tions, currents, tides and fishing are risky. Menfolk are honoured first in this society; their hard work, persistence and the inherent risks show why.

The harsh conditions show just how intractable the lot of the islands is. Tiny and remote, they are vulnerable to both too little water, drought, or to too much, erosion and rising tides. Distance and dispersion limit trading opportunities and fragment the na-tional market, as does small populations — half of the populace of the outer islands is on Tarawa, only the very young and old remain.

Subsistence lifeLife is still basic subsistence: fish and coconut supplemented where possible — not always — by babai, a root crop, pigs, chick-en, eggs and rice when the latter can be delivered from Tarawa or Majuro.... Coconut thrives in nutrient-free soil, and for long periods even without rain. It is exceptionally versatile but it takes fair effort to convert it to the immense range of its uses: food, drink, clothing, matting, roofing, sails, canoe hulls... and build-ings. Montesquieu thought putting a man in a hot climate made him lazy but Montesquieu made more mistakes than people re-alise. Huge physical effort by both men and women is needed to sustain this life. Of the two, women’s work is more nearly contin-uous — ‘we do all the work’, they joke — but men are required to invest in bursts of massive application. This partly explains why effort in the islands is chronically intermittent, why ‘we work to live, we do not live to work’ as men say.

Subsistence, moreover, is not a life of poverty. People assert they do not know poverty and they may be right. A vibrant sub-sistence culture soothes harshness and binds individuals and com-munities alike into a life of shared warmth and security. Europe-ans used to know this: life in 18th century rural Brittany fared

thus. In the harvest season workers rose at dawn not to stop un-til exhausted at nightfall yet as the rich archives shows, they still danced wild Breton lays until les petites heures.

On a truck taking us to the official maneaba opening, I am wedged between the minister, who is from this island, and the president. We pass a coral rock church, shining white, blue trim and beautifully maintained, then a school, which is a concrete shell, windows smashed and without books or desks inside.

Why is the church looked after and the school not? ‘The church belongs to the islands and gets money from the people. The school is a central government institution, doesn’t belong to local people’, he says.

Entering the maneaba, we duck low under the eaves, an act of respect enforced on all who enter there. With central pillars fes-tooned with green sheaves of woven palm patterns, its roofs soar a hundred feet into the air. It is resplendent, smells of new wood and fresh coral gravel. It easily holds a thousand people, each per-son in a prescribed spot — even the ancestors retain their places. The emcee leads the president and our party to our designated places. Paradoxically for an egalitarian people, pretty strict atten-tion is paid to both honour and place. The minister quickly bags one of the pillars for his back and, with four hours of speeches, feast, song and dance display ahead, looks pleased. Next up, I am put in my place, if I can express it that way.

Complex cultureThe culture of subsistence life is complex: the fundamental values evoke strong and sometimes contradictory impulses: the drive to hunt and the drive to conserve resources, egalitarianism and the respect for status, family and community values.

As in the maneaba, so in the family, there is strict hierarchy. Men eat first for the reasons mentioned already; children next, as the guarantee of the future; womenfolk come last. This is some-times jarring to Western visitors raised on ideas of equality among the sexes. But I would have to record that there can be few more enchanting sights than that of the womenfolk moving gracefully and delicately around the edges of a maneaba to serve their men-folk; the affection, care and attention shared on both sides reso-nate centuries of manners as well as individual esteem. It is not a sight one often sees on the Western cocktail circuit.

Family — twenty or so members covering all the generations — is a primal state of mind, the bedrock security of individuals. Members share what is hunted and gathered, such as fish, or even something purchased like a pick-up truck or a government salary. In four years I never heard of unemployment as a survival issue.

People of Kiribati



The family focus is also an obvious safeguard against loneli-ness in a lonely place. No individual need be on his own. Nor would anyone seek that. People do not favour walking alone or even reading alone since this is done only by deranged individu-als or himatang (Westerners) — inhabitants do not always clearly distinguish the two. When I talked to an official who was also a close friend about developing a reading programme and even a Kiribati dictionary, he simply said reading was discouraged as a sign of social maladaptation.

Family linksFamily links are stronger than community links and both are vastly stronger than ties to central government on Tarawa or to the region. This accounts for why the islands look as they do, part well-tended, part less so. Buildings and programmes linked to family are neat and tidy; those linked to a community may be, while those identified with central government, or foreign aid programmes, risk neglect. Who owns, maintains. But central gov-ernment allocates or can allocate little or no such budget even as foreign aid donors require ‘recipient’ governments to meet on-go-ing maintenance. Time and again, long-term prospects for the latter projects have not been as good as one might hope.

I found Western visitors to my office also puzzled by the long history of failures to reform the centralising government inherited from the British and develop private enterprise. They observed that commodities such as rice and fuel were distributed and sold in the islands by government corporations, a scandalous ineffi-ciency in their view. They also saw people liked the kiosks and had small surpluses of food and artefacts to sell from time to time, along with an appetite for retail consumer goods: camcorders, mobile phones, videos and the like. Aid economists thought they had spotted obvious opportunities to encourage private enter-prise and even to develop export markets: deep sea fishing (rather than just selling licences), salt, seaweed, black pearls.... Although against central planning, aid economists can develop quite elab-orate central plans — five textbook ‘pillars of enterprise’ were sometimes mentioned: sound governance, capitalist financial and tax systems, land registries, intellectual property protection and a culture of entrepreneurial individualism.

Project failureSound government they have long had. Since independence, elections have been free and fair in most places, conducted and overseen by electoral offices in a politically stable environment. But one by one, projects have foundered. Government corpora-tions remain politically popular partly because (with government subsidies) they keep prices low and partly because no single entre-preneur can behave counter-culturally, hiking prices and gaining riches at the expense of everyone else. Deep sea fishing in large vessels demands time at sea that is unlikely to accommodate vital family roles and structures; salt and seaweed production fluctuate wildly — partly because there is not always good weather in those airbrushed-airline-palm-tree scenes and, well, I was told, because womenfolk do not want their menfolk working out on the reef with other women. There is little enough capitalist financial sys-tem and perhaps unlikely to be more anytime soon. The bank, Australian-owned, finances bus purchases, which makes commer-cial sense because the service is profitable — so much so that its externalities clog the road. But I was told the Development Bank lent only to those with full-time jobs already — those most likely

to re-pay loans. Even then, for cultural reasons, the DB was reluc-tant to pursue any non-payers.

After too much time abroad, people can forget their own cul-ture. Many an expatriate has returned home from his years in Australasia with life savings to put into a small kiosk in the shade. Once stocked up and running, he can face demands from his ‘cus-tomers’ to ‘match’ lower prices down the road. This is the best-case scenario. The worst is having to give stock away altogether. Some learn to hide wealth.

The government’s state of mind is perhaps not so very differ-ent. Confronted by requests to approve private business ventures they wonder among themselves: ‘Why should just one person have all that; shouldn’t the government have that?’

Same difference?Large differences seem to exist between life on the outer islands and Tarawa; as they do in the Marshalls, FSM and Palau. The ‘main island’ is the big smoke and on the outer islands it is diffi-cult to get as much as a cold drink. But it is possible to exaggerate the differences.

Tarawa’s consumer society, for example, exists only on the sur-face. Scratch ever so little and you will rapidly find yourself face to face with the subsistence life: fishing, gathering coconuts, cutting toddy.... It is still the only life that makes sense in the conditions and, despite high exploitation, still works. Even the president has his own fishing spots and reef gear.

Connections between the islands are close. A visit to the outer islands quickly shows that most people know Tarawa and people there quite well, or are related to them. (So many outer island-ers live on Tarawa, each island maintains its own ‘home island’ maneaba there.) Unsurprisingly, people remain closely in touch with visits back and forth for christenings, birthdays, weddings and funerals.

Most importantly, everyone’s upbringing has been much the same. As schools are distributed around the islands, children have often been sent to other islands for their schooling years. Public servants ‘rotate’, spending two or three years working on one island before moving to another or back to Tarawa. Voters travel to Tara-wa for family events — and to bend their MPs ear. Indeed MPs often have to host them. Everything is shared, including the min-ister’s house and larder. People wind up with very similar life views.

Little imprintTwo centuries of contact with the West, including 50 years of development assistance, have changed the islands’ external ap-pearance but in my experience have left little real imprint on the islands’ state of mind. In a harsh environment, the need endures for subsistence and for subsistence culture. Individualism, the ac-cumulation of wealth by one person or family run counter to the root norms that have made subsistence such an outstanding suc-cess story: wealth must be shared or, at least, well-hidden.

Faced by modernity, globalisation under another name, peo-ple in my view have made choices, possibly quite unconsciously, about what they will or can support, viz, all that supports their values and the lifestyle that is integrated with those values. All oth-er projects risk being deferred or deflected — politely and subtly, perhaps — but surely. In two weeks or two months, a visitor does not always see these things. But Carroll was wrong and Bacon right: ‘they are ill-discoverers who think there is no land when there can be seen nothing but sea.’



For good reason a number of people are very interested in China. China should interest us not only because of its current economic growth and what that means for New Zealand but also because of its history and its culture. In New Zealand, relatively fewer people are interested in India, though that will change. Japan no longer holds the interest it once did. There are year-on-year decreases of students learning Japanese in New Zealand secondary schools and universities. And even fewer people, I would suggest, are interest-ed in South-east Asia.

Last year the Asia New Zealand Foundation surveyed New Zealanders’ awareness of the ten countries that together make up ASEAN, the Association of South East Asian Nations.1 The re-sults are revealing.

When New Zealanders thought about ‘Asia’, they identified China (86 per cent) and Japan (68 per cent). Fewer New Zea-landers identified ASEAN countries. The most frequently men-tioned ASEAN countries in the 2011 survey were Thailand (27 per cent), Malaysia (24 per cent), Singapore (21 per cent) and Vietnam (20 per cent). Others were mentioned by less than a fifth of New Zealanders, including Indonesia (17 per cent), Phil-ippines (14 per cent), Cambodia (9 per cent), Laos (6 per cent), Burma (3 per cent of New Zealanders mentioned Burma and 2 per cent mentioned Myanmar) and Brunei (mentioned by less than 0.5 per cent). When asked what they knew about specific South-east Asian countries, New Zealanders replied with com-ments that were not always accurate and reflected what they had seen in the movies or just thought was the case. Here are a few examples. On Indonesia, New Zealanders said:

it invaded and seized East Timor, killing many people includ-ing Australian journalists;

many people want their independence from Indonesia; it is a corrupt and poor country; a devastating tsunami struck the country a few years ago.

Benign neglect: New Zealand, ASEAN and South-east Asia

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South-east Asia is a region that holds historical importance and sentiment for New Zealand. But history and sentiment only get New Zealand so far in its engagement with the region and relying rather too much on this sentiment has resulted in New Zealand treating South-east Asia with a kind of benign neglect. New Zealanders’ low knowledge and perception of South-east Asian

-gage with ASEAN and South-east Asia as it navigates the tricky terrain of the changing geo-pol-itics of Asia.

On Singapore, New Zealanders said: it is a clean, well organised, well developed country with a

propensity for materialism and consumerism; it is a cosmopolitan place with a mix of Asian and Western

people it is a business hub and high-tech products are affordable littering the streets is a crime;

On Vietnam, New Zealanders said: it is a country colonised by France and ravaged by a devastat-

ing war that involved other countries (for example, the United States);

chemical warfare (for example, Agent Orange) was a tool in the killing of populations and crops;

today, the country seems to be coming out of its bleak past and is developing.

Outdated viewsThere is much that is missing from New Zealanders’ perceptions of these South-east Asian countries. For a start, many of these views are clearly outdated. These outdated views are one reason why Asia New Zealand has commissioned a series of papers with a focus on South-east Asia. But, despite the New Zealand public’s perceptions, the importance of South-east Asia to New Zealand is not something that others have just tumbled to. When he was foreign minister, Russell Marshall noted in 1988 that ‘New Zea-land has a direct stake in the stability, security and prosperity of the ASEAN countries’ because the countries of ASEAN

The Association of South East Asian nations



occupy a strategically important position along one rim of the Pacific. They straddle vital communications routes for [New Zealand’s] trade with North Asia, the Middle East andpoints beyond and for inflows of technology, tourists and skilled people.2

Some twenty years later, New Zealand academic Anthony Smith noted in the introduction to his edited volume on New Zealand’s relationship with South-east Asia that ‘Southeast Asia is still of prime strategic importance to New Zealand. New Zealand trade is dependent on shipping that passes through this region’, adding (in the context of a post 9/11 world) that the ‘war on terrorism adds a new dimension to regional security’.3

But why, with the growth of China, the waning interest in Japan and the little interest in India should we be interested in South-east Asia at all?

Important reasonsThe interest here is with New Zealand’s engagement with South-east Asia, for the following reasons.

First, South-east Asia is geographically and historically clos-er to New Zealand than other parts of Asia. Second, through its active and early participation in the Colombo Plan, New Zea-land helped educate some of South-east Asia’s elite. Third, and on various occasions, New Zealand contributed military support to South-east Asia. Fourth, by welcoming refugees and migrants from South-east Asia, New Zealand has become a home for many South-east Asians. And fifth, New Zealand’s relationship with South-east Asia has suffered from what a New Zealand official described to me as ‘benign neglect’.

Let me explore this further. The importance of South-east Asia to New Zealand was recognised over half a century ago. New Zea-land contributed soldiers, and other military personnel, through the participation of military units in South-east Asia: to Malaya and Singapore during the Second World War, to conflicts in Ma-laya/Malaysia during the ‘Emergency’ and the Konfrontasi and to Vietnam during the Vietnam War.

The Colombo Plan was an initiative under which Common-wealth countries educated Asia’s elite as part of a broader suite of activities designed to stem the tide of communism sweeping across South-east Asia and ‘to bolster elites in newly independ-ent countries [in South-east Asia] that many believed had been ill-prepared to go it alone’.4 Under the Colombo Plan, New Zea-land first educated students from South-east Asia from the former British territories (Malaya, Singapore, Sarawak, North Borneo), and Thailand, from the plan’s inception in 1950 (the first students arrived in New Zealand in 1951) until the 1980s, when the edu-cational and training work became integrated into New Zealand’s bilateral aid programmes.

Continuing relevanceIt might be argued that the Colombo Plan is no longer relevant for New Zealand and its engagement in South-east Asia. At one level that is true. Those who New Zealand educated during the period of the Colombo Plan are now mostly retired. The Colom-bo Plan students in New Zealand at this time were, Nicholas Tar-ling reminds us, ‘objects of interest, sympathy and curiosity, not of resentment or fear’5 and the nostalgia associated with it in New Zealand (even if not in other countries that hosted Colombo Plan students) is remarkable, given the first Colombo Plan student ar-rived in New Zealand over 60 years ago. Indeed, educating South-

east Asian students under the Colombo Plan has been, for New Zealand, ‘the gift that keeps on giving’.

Outside of what we might consider as these soft power at-tributes of soldiers and students, New Zealand is also politically engaged in South-east Asia. A number of New Zealand’s ASEAN diplomatic posts were amongst New Zealand’s first to open, after posts were opened in Canberra, Washington, London and Otta-wa. New Zealand is a member of the East Asia Summit (EAS), a dialogue partner of ASEAN, and a member of the ASEAN Re-gional Forum (ARF). In the region of South-east Asia, distinct from its ASEAN relationships, New Zealand was a member of the short-lived South East Asia Treaty Organisation, and is a member of the Five Power Defence Arrangements.

At this juncture, it is worth drawing attention to the fuzzy but important line between ‘ASEAN’ and ‘South-east Asia’. We often use the terms interchangeably but they are, and need to be treated as, distinct. ASEAN, the Association of South East Asian Nations, as an institution was formed in 1967. It is, in large part, a product of its time. In the wake of post-colonialism, intra-re-gional tension (between Malaysia and Indonesia) and the need for economic growth, ASEAN concentrated on economic devel-opment, nation-building and peace, freedom and co-operation in South-east Asia.

Geographical region‘South-east Asia’ is a geographical region that usually, although not always, includes the ten countries of ASEAN. But East Timor, for example, is a part of South-east Asia but not yet a member of ASEAN, although it is a candidate to join; and Papua New Guinea has held observer status at ASEAN since 1976, while Bangladesh is lobbying for observer status. Papua New Guinea is no further from Jakarta (the headquarters of ASEAN) than My-anmar but is not generally acknowledged to be part of Asia, let alone South-east Asia.

The other important reason to make a distinction between the organisation (ASEAN) and the region (South-east Asia) is that New Zealand’s relationship with each is different. For example, New Zealand’s relationship with Singapore, with which it has a long historical relationship (predating ASEAN) and an existing defence partnership through the Five Power Defence Arrange-ments, differs considerably from its relationship with Myanmar, which is nascent by comparison.

Frances Swindell of the Department of External Affairs talks with Thai students on Colombo Plan scholarships in the late 1960s



The intensity of New Zealand’s relationship with South-east Asian countries can also vary according to who is chair of ASEAN (the institution) in any given year. So, for example, New Zealand’s relation-ship with the recent chairs of Vietnam and Indonesia (where it has resident missions and, thus, resources) arguably will have required less work than its rela-tionship with the current chair, Cambodia, and forthcoming chairs, Brunei and Myanmar, where New Zealand does not have resident diplomatic rep-resentation.

But we also need to be careful not to give ASEAN more credit than is due. ASEAN’s ina-bility to address issues adequately, from the Asian financial crisis to the Thai-Cambodian border dispute, is used as evidence of its growing illegiti-macy. Moreover, as important as the differenc-es between states within ASEAN is the fact that

Singapore and New Zealand military personnel lay a wreath in the Christchurch Botanic Gardens in memory of those who died in the Christchurch Earthquake.

Firm foundationNew Zealand has a firm foundation with South-east Asian countries and with ASEAN on which it can build. Because of its small size, there are limits to how much New Zealand can shape the region, but these limitations do not mean that New Zealand can sit on the sidelines. New Zealand could leverage off its history with the region in order to tighten the geographical and economic bonds, although relying on sentiment is not sufficient. New Zealand needs ASE-AN, and needs to play its own role effectively in ASEAN-centred institutions, to ensure a stable region, free and secure trade routes and a productive US-Sino relationship in the region, for South-east Asia (and ASEAN as the institutional home) is the terrain on which great geo-political shifts will be played out.

South-east Asia is familiar territory for New Zealand, which educated its elite and defended its shores. Historical ties have served New Zealand remarkably well. However, New Zealand would be unwise to rely on them alone because these ties will diminish over time. New Zealand has treated South-east Asia and ASEAN with ‘benign neglect’ but that neglect has come at a cost to New Zealand. Unless New Zealand moves from neglect to engagement in a region where there are significant geo-political shifts, that cost may become too great for New Zealand to bear.

NOTES1. Asia New Zealand Foundation, New Zealanders’ Perceptions

of Asia and Asian peoples in 2011, (Wellington, 2012), online at www.asianz.org.nz/sites/asianz.org.nz/files/Asia_NZ_per-ceptions_of_asia_report_2011_final.pdf

2. Russell Marshall, ‘New Zealand and ASEAN’, in Ralph H.C. Hayburn (ed), New Zealand and the ASEAN countries: The Papers of the Twenty-Third Foreign Policy School, 1988 (Dunedin, 1988), pp.9–10.

3. Anthony Smith, ‘Introduction: The Emergence of New Zea-land’s relationship with Southeast Asia’, in Anthony Smith (ed), Southeast Asia and New Zealand: A History of Regional and Bilateral Relations (Singapore, 2005), p.5 (my emphasis).

4. Ministry of Foreign Affairs and Trade, The Colombo Plan at 50: A New Zealand Perspective (Wellington, 2001), p.5. The Colombo Plan still exists today as an economic and social development programme based in Sri Lanka.

5. Nicholas Tarling, International Students in New Zealand: The Making of Policy Since 1950 (Auckland, 2004), p.13.

ASEAN, as an institution, in the secretariat and through the secretary-general, is deliberately kept weak relative to its mem-ber states. Power in ASEAN still resides in the capitals, not withASEAN itself. This underlines the importance for New Zealand of maintaining and strengthening the bilateral relationships as well as the institutional relationship with ASEAN. Whatever ASEAN’s shortcomings, it is the only organisation of its kind. Or, as one South-east Asian scholar plaintively put it to me, ‘it is the best we have’.

Strategic reasonsThere are also strategic reasons for deepening economic links with ASEAN and South-east Asian countries. New Zealand’s trade passes through the choke-point trading routes of South-east Asia en route to China. If those trading routes were to become im-passable, New Zealand would want to ensure that its trading to (rather than just through) South-east Asia was unaffected. More-over, these economic ties with South-east Asia build on the his-torical and defence ties noted earlier. New Zealand does not have the same intensity of defence ties with China nor, arguably, with any of the major regional players as it does with ASEAN and the countries of South-east Asia. Trade with South-east Asia is part of an important suite of tools at New Zealand’s disposal, but is only as useful as the strength of the other tools of diplomacy, defence and aid. New Zealand’s economic security relies on the security of the region of South-east Asia, in which New Zealand has both a stake and a role.

New Zealand needs to enhance and deepen its engagement with ASEAN. To some extent this requires ASEAN complicity. It is not just a matter of New Zealand, in whatever form, jumping up and down wanting to be noticed, relying on historical accom-plishments and goodwill to get it in the room. New Zealand has to be seen by ASEAN as an active regional player. Strengthen-ing economic ties, through bilateral free trade agreements and the AANZFTA, are good in itself, but it also serves a larger pur-pose. Strategic, diplomatic and defence ties, alongside economic engagement, all form part of the range of connections, each of which serves the purpose of the other. ASEAN has deliberately given New Zealand a strategic foothold in the region, particularly through the EAS. In the EAS New Zealand can sit at the table with not only the ASEAN powers but also the other global players as well.



CONFERENCE REPORT

China–New Zealand ties: a timely focus

A one-day symposium was held in Wellington on 5 Septem-ber 2012 to mark the 40th anniversary of the establishment of diplomatic relations between China and New Zealand. It was a substantial event, co-hosted on the New Zealand side by the Contemporary China Research Centre at Victoria University of Wellington and by the New Zealand Institute of International Affairs. Their China partner was the prestigious Chinese Acade-my of Social Sciences based in Beijing. It was an occasion to not only mark a notable anniversary but also take a serious look at a relationship that has become hugely important to New Zealand. How does New Zealand make the most of the opportunities be-ing offered, including in commercial terms, with a China that has moved back to centre-stage on the world scene? Where do other significant aspects of the relationship fit — cultural, educational, migrational, diplomatic and strategic — that need to be factored in when contemplating the future direction of bilateral ties?

The attractive venue for the occasion was the Legislative

Brian Lynch reports on a symposium held recently in Wellington.

Brian Lynch retired as director of the NZIIA in July 2012.

The symposium then took the form of four panel discussions. The first panel offered a reflective look at how the bilateral relationship has evolved. The next two panels had a focus on some specific core aspects of the relationship. The fourth was asked to address the question of ‘where to from here’ and to identify challenges ahead for the two partners in their quest to continue to add new breadth and depth to the relationship. There was frequent reference to the unique position New Zealand has established in its relationship with China, having been the first developed economy to recognise China market economy, successfully completed negotiations with China over its entry to the World Trade Organisation, initiated negotiations on a free trade agreement, and successfully conclud-ed a high quality trade agreement.

The twenty lead speakers and panelists were a diverse group. They came from academia in China and New Zealand, the ‘fourth estate’ in New Zealand and elsewhere, research institutes, private enterprise and the political community. They brought a wealth of personal experience and relevant professional perspective to the symposium. The large audience, too, featured many who had serious former or current engagement in the relationship; they were well-placed and seized the opportunity to contribute to the spirited dialogue that occurred after every panel. Predictably, the health of the bilateral relationship in its many facets dominated the agenda. In retrospect, there could have been rather more at-tention to the useful co-operation and collaboration going on in the multilateral setting, and the planned Beijing meeting might well cover this aspect.

Important partnershipJohn Key’s address traced the growth of bilateral ties from their slim beginnings in the early 1970s to the broad-based relationship that now exists. He described it as one of New Zealand’s most important partnerships. The 2008 free trade agreement, he said, had unleashed exponential growth that had catapulted China into the position of being New Zealand’s second-ranked trading part-ner, the largest provider of foreign imports to New Zealand and a welcome source of foreign investment. Two-way trade was on track to double by 2015. China is also now New Zealand’s second largest source of migrants and supplies the highest number of for-eign students. Chinese tourists visiting New Zealand are second in number only to those from Australia. Key highlighted solid bi-lateral co-operation on regional issues including emergency relief and development assistance, and very recently a new collaborative venture in the South Pacific, specifically involving a trilateral pro-ject with the Cook Islands. He noted that the relationship had achieved a level of maturity that allowed the partners to hold dif-fering views on some global and regional issues that could when called for be discussed openly and honestly. The development of a China Strategy, the recent formation of the China Council and his own regular visits to China demonstrated the importance his government attached to the relationship.

Pat Walsh

Council Chamber in the old Parliament Building. In fit-ting recognition of the signif-icance of the anniversary and the impressive calibre of those in speaking roles, close to 250 registered for the symposium and most remained through-out the day. This was a rare number for such an event and would have been higher had the venue been allowed to accommodate more. It was pleasing for the organisers and the symposium’s eleven spon-sors that the attendance was at such a high level.

Following welcoming re-marks by Victoria Universi-ty’s vice-chancellor, Professor Pat Walsh, and the chair of the Research Centre, Tony Browne, a former New Zea-land ambassador to China, the keynote address was giv-en by Prime Minister John Key (the text of which is to be found elsewhere in this issue). Tony Browne



Panel One, convened by the chair of the China Council, Sir Don McKinnon, reflected on 40 years of bilateral politics and di-plomacy. The opening speaker was Chris Elder, also a former ambas-sador to China. He gave a percep-tive account of how the Chinese economy and society had been transformed as, of course, New Zealand’s have; his remarks were embellished with many personal anecdotes. One of the most ex-perienced of New Zealand’s small community of genuine ‘China

Zealand to lessen its depend-ence on commodity exports. He made a point some others did, one being Harris, that managing the twin complex-ities of relations with China and the United States, and the pervasive tensions be-tween them, will call for a deft touch on New Zealand’s part. Dr Yang was one of those who also identified the last point, while noting the strong trust of New Zealand that he believed existed in

Dr Jian Yang Dr Han Feng

China. His plea for the New Zealand public to be better educated about China was echoed by later speakers. No stranger to China, Peter Harris was impressed by the magnitude of the extraordinary change occurring there, and the prevailing confidence and sense of purpose that underpinned it. An especially noteworthy com-ment from him was that it is not necessary for countries such as New Zealand and the ASEAN members to try to decide China’s ultimate future in order to be prepared for events as they unfold.

Panel Two was chaired by Professor Brian Moloughney (pro-vice chancellor, Otago University, and an early graduate of the New Zealand–China exchange programme). It moved the sym-posium’s focus to the social context of the relationship, specifical-ly to issues around migration, culture and education. The highly regarded professor of Asian studies at Auckland University, Dr Manying Ip, was the principal speaker. Rightly so, she profiled the impressive contribution made by the more than 100,000 Chinese resident in New Zealand to the country’s society and economy, especially since the ‘watershed years’ of the mid-1980s. Drawing on personal experience as a Chinese migrant and with considera-ble force, she pressed the point that cultural diversity needs to be recognised and accepted before it can be truly embraced. Liyang Ma, Auckland manager for the Asia New Zealand Foundation, had faced a more recent but not dissimilar experience to that of Professor Ip in first settling in New Zealand; energetic sporting activity had helped open many doors for her.

Michael Stedman is the managing director of Natural His-tory New Zealand. His company has been successfully involved in making over 70 documentaries in China in the past fifteen

Professor Brian Moloughney

Left: Dr Manying IpBelow: Liyang Ma

Sir Don McKinnon

hands’, Elder pointed out that in the early years the Chinese au-thorities had held a higher level of ambition for the relationship than their New Zealand counterparts. But it was illusory to speak of New Zealand having a ‘special relationship’ with China; 46 other countries made the claim. With some salutary ‘home truths’ to conclude for his largely New Zealand audience, Elder noted there was no ground for complacency. This particular bilateral re-lationship more than most New Zealand had would always be a work in progress.

The accompanying lead speaker was Dr Han Feng, deputy di-rector of international strategy at the Chinese Academy of Social Sciences. He, too, welcomed the strengthening of two-way links and emphasised the challenge each country faced in adapting to new regional and global dynamics. China’s priorities, he observed, would, in addition to domestic stability and reform, remain fo-cused on major power relations, regional security issues, and set-tling on the most credible among the competing forms of future Asian regional architecture, where China currently favoured the ‘ASEAN plus One’ and ‘ASEAN plus Three’ options.

Trade agreementThe three panellists in the first session were two New Zealand politicians, Phil Goff (Labour) and Dr Jian Yang (National), and Peter Harris, a former Ford Foundation representative in China and the first director of the Asia New Zealand Foundation. Goff recalled that the free trade agreement had been signed during his ministerial term in the previous Labour administration and he had been intimately involved in the negotiation process. While applauding the trade benefits that had already flowed to New Zealand from the agreement, he highlighted the need for New



years. They have been shown in 180 countries but not yet in New Zealand. He reinforced Dr Yang’s complaint that much do-mestic media coverage in New Zealand of events in China gives a distorted view. This, he felt, was a ‘dangerous space’ for New Zealand to be in. Another pow-erful message he gave was that New Zealanders wanting to do business or make a favourable

emphasised the early success and comprehensive nature of the free trade agreement, which he termed a ‘win-win’ for both parties and a model for other economies to follow.

Three of the four panelists in session three had current in-volvement in China. Richard Yan, chief executive of Richina Group, felt New Zealand exporters could do more to ‘leverage’ the advantages of the free trade agreement. His call for small and medium enterprises to have a common ‘platform’ led to an inter-esting discussion on the elements of a ‘New Zealand brand’, one that went further than the well-worn portrayal of a ‘clean and green’ image. Consideration of how a national ‘brand’ fits with the increased importance of international supply chains was left for another day. John Penno, CEO of Synlait Milk, said his com-pany found China a rewarding place in which to do business. His blunt advice was that doing successful business in China was no different from succeeding anywhere else; New Zealand exporters had to make the effort to get out of the office and concentrate on building productive and long-term business relationships. He and Jamie Tuuta, the Maori Trustee, had a positive approach to Chinese investment in New Zealand. Tuuta noted that much of the future growth in New Zealand’s high quality food and forestry exports would come from Maori owned and farmed land. The topic of foreign direct investment also featured in the remarks of Girol Karacaoglu, chief economist and deputy secretary at the Treasury; he stressed that positive foreign direct investment, in-cluding from China, had a prominent place in the government’s economic growth agenda. Such investment was important for its positive impacts on technology and management behaviour; it was not merely a substitute for other forms of overseas borrowing.

Fran O’Sullivan

impression in China need to understand that building ties of real value is not accomplished overnight; it requires patience and per-sistence. Charles Finny has had considerable private and public experience with the China relationship over many years. He took part in the symposium in his capacity as the chair of Education New Zealand. There are presently more than 25,000 Chinese stu-dents at New Zealand educational institutions. This is not as high a figure as in some past years and Finny’s agency has identified the China student market as its top priority.

Economic focusThe third panel was chaired by Fran O’Sullivan, much respected for her forensic skills in public commentary. This session had an economic focus, specifically the free trade agreement and ways in which its full potential might be better realised. One of the two lead speakers, Bank of New Zealand chief economist Tony Alexander, has a close interest in China’s growth record with cer-tain of its partners, not least Australia and New Zealand. In New Zealand’s case he observed that our exports had increased 134 per cent since the free trade agreement was signed, while imports into China from all countries had grown 52 per cent, illustrating how New Zealand’s strong growth had well exceeded natural demand growth out of China. Undeniably these were compelling statistics. But Alexander suggested some caution in attributing the growth in goods and services exports solely or largely to the agreement. Without a free trade agreement Australia had also done very well; clearly there were other factors at play. Starkly evident was the fact that a disproportionate amount of New Zealand’s exports was still in minimally processed primary products. The free trade agree-ment would show its true worth when New Zealand exporters moved seriously upmarket, ‘beyond milk and trees’. This would take them into the added value territory, and here there were en-couraging signs emerging of growth in quality merchandise and processed food items. The second speaker, Dr Ma Tao (CASS),

Tony Alexander Dr Ma Tao

Big challenges The fourth and final panel was tasked with identifying where the big challenges would lie for the two countries in taking the relationship forward. It was chaired by Tony Browne. What would the key features of the Chinese economy and society be in 2025, asked Professor Li Xue-song(CASS). He forecast that by then the economy would match those of the United States and Europe in size, although per capita income would still be only one-quarter of that in the United States. Growth rates in popula-tion and workforce numbers would have declined. Urbanisation would provide the ‘growth engine’ for a continued rise in labour productivity that would sustain the momentum of economic expansion. In another of his typically incisive contributions, po-litical analyst Colin James was in no doubt that New Zealand’s core foreign policy task for the next twenty years was ‘managing China’s management of us’. In response to that challenge, he did not envisage any wavering from the independent policy posture of the past twenty years that could threaten to put New Zealand in the uncomfortable position of having to ‘take sides’. In pursuit of that objective New Zealand would be at one with the countries of South and South-east Asia. James closed with a list of mind-focus-ing questions for the audience to ponder on the alternative paths China might take, domestically and externally, that would have implications for New Zealand.

Professor Li Xuesong



The three panelists in the final session brought a range of perspectives to the discussion. Rowan Callick is the Asia–Pacific editor of The Australian with very credible credentials as a long time observer of regional trends and events. Much of the on-go-ing debate in Australia about aspects of the China relationship, for example over the merits of foreign investment, mirrored the discussion in New Zealand, but the prominence of defence links with the United States did not have the same resonance in New Zealand. Some ‘hedging’ would be called for while the new lead-ership imminent in China settled into place. He predicted that New Zealand would face new and unforseen challenges as its Chi-na ties ‘bulked up’. Business leader Rob Morrison cited his expo-sure to China from being based in Hong Kong as giving reason to be critical of foreign companies, including from New Zealand, that failed to do adequate homework about the ‘big drivers’ at work in Chinese society and economy before trying to launch their ventures. Like Professor Li, he stressed the huge impact in China of rapid urbanisation. He saw a pressing need for a more strategic approach to China on New Zealand’s part, in both busi-ness and government. Whether or not a firm exported to China it still needed a China strategy, given that Chinese consumers were now the biggest influence on global trends in prices and volumes of so many items, and China’s pervasive presence in so many third country markets of interest to New Zealand.

Fundamental questionOn the eve of the symposium, Professor Rob Ayson, director of the VUW Centre for Strategic Studies, had co-authored with Chris Elder a thoughtful discussion paper titled China’s Rise and New Zealand Interests, A Primer for 2030. On the panel Dr Ayson raised a fundamental question: whether the relationship could reach a point of becoming almost ‘too close for comfort’ for New Zealand and to advance further might require modifications to other significant ties to which New Zealand attached importance? He concluded that there is unlikely to be such a defining moment confronting New Zealand in the foreseeable future. This, how-ever, did not rule out the prospect of tension arising around a set of smaller issues that New Zealand could face, and on which the big regional powers, principally China and the United States, had different stances.

In summary remarks after the final panel, Professor Zhu Feng (Peking University), the current Kippenberger professor at the Centre for Strategic Studies, counselled against allowing any spe-

focus on bilateral issues.

Broad satisfactionA report of modest length cannot do justice to the wealth of prac-tical experience and personal insight acquired in the China–New Zealand context and brought together for this symposium, nor to the robust discussion around the panel themes. The book of proceedings that is planned will better serve that purpose. As a broad generalisation, however, there was an unsurprising level of satisfaction with the mood and content of the relationship that has emerged after 40 years of formal relations. Some relevant sta-tistics, impressive by any measure, were tabled to demonstrate how both parties have drawn benefit from the relationship, not-withstanding the obvious scale differences between them. It was clear from the presentations that for each partner there has been value in building and maintaining meaningful ties and continu-ing to explore new avenues of shared interest. This is so even if the incentives are not all the same on both sides; they very rarely are in any bilateral relationship.

At the same time, the symposium was never envisaged simply as an opportunity for the two partners to engage in self-congrat-ulation. It was always intended as an occasion for a no-holds ‘re-ality check’, and generally speaking this proved to be the case. In keeping with the theme of openness and honestly referred to by the prime minister, there was no reluctance to expose what were perceived to be areas of under-achievement. The most striking of which, probably to the surprise of many present, was captured in the punchy observations from analysts and the New Zealand private sector that the free trade agreement still fell well short of fulfilling its promise.

There were pointed comments, too, about sub-optimal perfor-mance on New Zealand’s part in people-to-people links, notably so in the sensitive areas of migration, education and cultural under-standing. Nor could the New Zealand authorities represented have failed to take in another unambiguous message. It was that the new China Strategy launched some months previously with much fan-fare provided a public benchmark against which observers in both countries would assess the worth of future initiatives to lift the re-lationship to a higher level. That there was this discernible edginess to some of the discussion did not diminish but rather enhanced the value of the symposium. As befitted the anniversary being recog-nised, it was a timely, thought-filled, focused and forward-looking event. Preparations are in hand for a reciprocal event hosted by the Chinese Academy of Social Sciences to be held in Beijing towards the end of the year. A book is planned that will provide a permanent record of the two events.

Colin James Rob Morrison

cific and perhaps short-term stra-tegic concerns to distract attention from the commonality of interest China and New Zealand shared across a wide range of regional and global issues. He spoke of a current dichotomy in China of ‘strong eco-nomics and weak politics’ but felt this would not be enduring. In a final word of advice he suggested a key aspect of New Zealand’s ap-proach to development of stronger ties with China would be through a mutual interest in cultivating ‘material realism’, and collabora-tion in plurilateral settings rather than pursuit of a single-minded

Professor Zhu Feng



Notes on reviewers

Dr Anthony Smith is a fellow of the Centre for Stra-tegic Studies, Victoria University of Wellington.

Associate Professor Stephen Hoadley teaches economic statecraft and foreign policies at the University of Auckland.

Michael Powles, a former New Zealand ambassador to China and high commissioner to Fiji, was found-ing chairman of the Pacific Cooperation Founda-tion and is now a senior fellow with the Centre for Strategic Studies.

Mark Pearson is a diplomat and the author of Paper Tiger: New Zealand’s Part in SEATO 1954–1977 (NZIIA, 1989).

LEAVING WITHOUT LOSING: The War on Terror after Iraq and Afghanistan

Author: Mark N. KatzPublished by: Johns Hopkins University Press, Baltimore, 2012, 147pp, US$19.95.

Leaving Without Losing might at first blush seem like another vol-ume in what is now a vast literature on ‘the war on terror’, but Mark Katz’s rare contribution here is to place the US struggle with militant forms of Islam into a wider historical and strategic con-text. Katz, a professor at George Mason University, is an expert on Soviet/Russia foreign policy and the Middle East, and very well versed in the contemporary history of radical and revolutionary movements. (Katz was invited to be one of several overseas schol-ars who participated in the NZIIA’s Arab Spring conference in August 2011.)

As the title suggests, Katz examines the prospects for the Unit-ed States after the withdrawal of its forces from Iraq and the wind-ing down of the contribution in Afghanistan. Katz judges that the problem of extremism will be with us for years or decades, and al-Qaeda affiliates may view these drawdowns as examples of the West’s lack of resolve. As the book’s title suggests, however, on bal-ance, the United States can weaken extremism in the longer run. The example of the US drawdown from Vietnam is an apt one; seen at the time as American weakness, it resulted in communist bloc countries over-reaching and ultimately establishing bitter ri-valries with each other. One might reflect on the supreme irony that Vietnam, one of the few extant Marxist states, is currently one of America’s strongest boosters in the Asia–Pacific region.

Although this is a point rarely made these days, Katz credits the Bush administration with having something of a vision for spread-ing democracy in the Middle East, in spite of a view amongst some conservative commentators that it could not work in Muslim ma-

BOOKSjority countries. This is not to ignore the significant ethnic and sectarian barri-ers to workable represent-ative entities in the Mid-dle East, as Katz notes, of which Iraq’s fissures are a troubling example. But drawing the comparison between Bush and Oba-ma, Katz also finds major differences between these two administrations. The drawdowns lessen the ‘over-extension’ problem that historically has spelled trouble for global powers, while the Obama administration has pursued multilateralist solu-tions and rejected the idea that political change is driven by the im-position of American hard power. Therefore, supporting the Arab Spring is ‘an opportunity that the United States cannot afford to forego’.

This book also explores individual cases. The on-going Pal-estinian situation, as well as many other situations (Kashmir, Chechnya) that involve Muslim populations, have an obvious link to Islamic radicalisation for Katz. On Pakistan’s alleged dou-ble-dealing on the extremism question, Katz ponders the fasci-nating ‘Machiavellian’ suggestion that perhaps the United States ought to split the Pakistan Army from the Pushtun community by hinting at self determination for the latter. Pakistan would pay close attention to that, although the unintended consequences of such a move of realpolitik might need to be thought through care-fully. Speaking of realpolitik, this volume is deeply informed by the lessons of history. To Katz, movements of revolutionary Islam are highly unlikely to ever be able to cohere to form the ‘Cali-phate’ that is expounded by their leaders. Iran’s support of (Chris-tian) Armenia over (Shia) Azerbaijan, one assumes on grounds of undercutting Iran’s own Azeri minority, or legendary anti-Soviet mujahideen Ahmad Massoud subsequently taking largesse from Russia to fight the Taliban are evidence if any was needed that interests trump shifting allegiances. This leads Katz to the consid-eration that Iran’s fear of radical Sunni Islam, should these move-ments emerge to greater prominence, may lead to vastly different possibilities in terms of dealing with Tehran. Iran and the Taliban, when the latter was in power in Afghanistan, were greatly embit-tered neighbours.

There are a few issues raised in this thought-provoking book that might require further discussion. The term ‘radical’ does not appear to have a definition in this study. This can be an elastic term. Does it still apply to Islamist movements (such as the Egyp-tian Muslim Brotherhood) that rise to power through the ballot box (rather than through violence), must work pragmatically with other political forces, and come into office under quite different circumstances to the virulent anti-US sentiment that was palpable during the Iranian revolution?

Finally, the brevity and readability of this volume needs to be re-marked upon; it is a model of its kind. The old aphorism applies: ‘I didn’t have time to write you a short letter, so I wrote you a long one instead.’ Katz has written for us a finely constructed ‘short letter’ that traverses some of the most profound questions of the Middle

NovDec issue 2012.indd 28 12/10/12 9:42 AM


ASYMMETRIC TRADE NEGOTIATIONS

Editors: Sanoussi Bilal, Philippe de Lombaerde and Dianna TussiePublished by: Ashgate, Farnham, Surrey, UK, 2011, 222pp, £55.

Given that almost all of New Zealand’s trade negotiations are with larger partners (only Brunei is smaller), this book on asymmetry and how to cope with it is timely.

The theme of this book is straightforward: small partners are always at a disadvantage in trade negotiations. While trade deals are constructed by offers and acceptances, in theory giving all par-ties equal opportunities to say yes or no, it is the larger partners that can afford to refuse to accept a particular trade-off. Result-ing agreements reflect a set of bargains biased in favour of the powerful. Furthermore, each successive trade agreement sets the agendas and standards for subsequent negotiations, so the glob-al trade regime increasingly reflects the preferences of the North, particularly the United States.

The WTO ostensibly provides a rules-based framework equal-ly accessible to all members, small as well as large, and this is valued by New Zealand. But as Woolcock’s chapter shows, this framework favours the players with more institutional resources and influence as well as extra-institutional options to engage, ma-nipulate, or avoid WTO disciplines and dispute settlement pro-cesses. The WTO is coloured by what Woolcock calls the ‘OECD Consensus’, which appears to be a trade counterpart of ‘the Wash-ington Consensus’ regarding international aid and loans.

As multilateralism has stalled, not least because at Cancun in 2003 leading members of the South such as Brazil and India and other G22 states have begun to resist, bilateralism has emerged among states of the North as the preferred mode of trade talks. But whatever biases infect multilateral institutions, they are less detrimental to the interests of small players than bilateral nego-tiations with big players. Not only can big players refuse to play except by their own rules but also they have begun loading the trade agenda with non-trade demands such as protection of for-eign investment and intellectual property, curbing of government procurement, health, and welfare options, and imposition of environmental and labour standards. These latter strictures neu-tralise some of the comparative advantages enjoyed by the South (low labour costs, for example) and also raise compliance costs for governments already burdened with debt and deficient in ad-ministrative expertise. ‘Reciprocity’ and ‘the single undertaking’ (comprehensiveness) are doctrines of the North that clash with the South’s requests for ‘special and differential treatment’. As the editors sum it up, ‘equal treatment among unequal partners con-stitutes a form of discrimination in itself ’.

The bulk of the book comprises five chapters detailing how asymmetry is manifested in the European Union’s negotiations with the ACP and Latin American countries and the United States’ negotiations with Colombia and Thailand and in the abor-tive Free Trade Area of the Americas. In each case the authors

present data showing the smaller partners’ greater dependence on the larger partners’ markets than the reverse, graphically illus-trating this facet of struc-tural asymmetry.

How can the develop-ing countries cope with asymmetry? The authors suggest three strategies for the South: form sympa-thetic inter-governmen-tal coalitions (such as the G-22, G-33, G-77, and G-90); ally with non-state actors (international non-governmental organ-isations, civil society); and shape international norms to favour the weak by encouraging new norms and forming a new consensus (or new ‘epistemic commu-nities’). The authors call the latter ‘the power politics of knowl-edge’. Their concluding recommendation is: victims act!

While this book is grounded on dependency theory popular in the 1970s and sidelined by the 1990s, it offers credible exam-ples from the 21st century. And while its prescriptions are neither new nor well articulated, they constitute a timely reminder of en-during global political-economic imbalances. For New Zealand the implied lessons are: beware of asymmetry biases, be wary of unequal bargains, and act collectively and morally to secure the best deal possible.

STEPHEN HOADLEY

THE PACIFIC ISLANDS IN CHINA’S GRAND STRATEGY: Small States, Big Games

Author: Jian YangPublished by: Palgrave Macmillan, Basingstoke and New York, 2012, 254pp, US$85.

Does China pose a threat to Pacific Islands countries? Or to West-ern interests in the Pacific Islands region? Some observers, most-ly from countries outside the region, are emphatic that it does. They warn that China’s growing influence poses a threat to the established, Western-friendly, order in the region, a threat also therefore to Australian and New Zealand interests and, in a some-what patronising stretch, a threat also to Pacific Islands countries themselves.

To date the main consequence for Australia and New Zealand of China’s rise has been economic — and very beneficial. The sale to China of minerals from Australia and primary produce from New Zealand has helped these two economies avoid serious economic damage in the present global downturn. Undoubtedly the economic links between Australia and New Zealand, on the one hand, and the Pacific Islands countries of the Pacific, on the other, together with islands countries’ growing economic links of

East, and of US foreign policy, informed by comparative context and a vast knowledge of global trends and local contexts. Being so accessible, it is more likely to have the influence it deserves.

ANTHONY SMITH



their own with China, have resulted in China’s econom-ic rise benefiting the islands countries, both directly and indirectly.

But proponents of the China threat thesis foresee an increasingly powerful China gradually seeking to chal-lenge United States security predominance in the Pacific Ocean. They point to in-creasing military expenditure by China, Chinese assertive-ness in East Asia and negative Chinese reactions to the role of the US Navy on the high seas off her shores. Others argue that China is simply project-ing increasing power externally commensurate with its burgeon-ing economy. They describe Chinese military expenditure as still being tiny compared to that of the United States. They argue, moreover, that China’s leaders would be foolish to upset the in-ternational stability on which their country has depended for its economic growth; doing so could even imperil stability within China.

Undoubtedly accommodation and compromise will be neces-sary if confrontations are to be avoided in the Asia–Pacific region. Hugh White of the Australian National University (ANU) pre-dicted some time ago that greater danger to security would come from United States reactions to China’s rise than from China’s rise itself. Since then, intensified US security collaboration with other countries of the region will have reinforced the belief of some in Beijing that the West opposes China’s rise to global power status. This will make confrontation more likely. Would such confron-tation impact on the countries of the Pacific Islands region? It is hard to imagine a more important foreign policy issue facing New Zealand in the years ahead.

Dr Jian Yang’s recent book is the most valuable and informa-tive guide available on the subject. Whereas most academic con-tributors have been more expert on the Pacific than on China, a particular value of Yang’s book is his insight on China. Born in that country, Yang graduated with a PhD in international rela-tions from ANU, joined Auckland University in 1999, and in 2011 was elected as a National Party list member of the New Zealand House of Representatives.

Yang’s book asks at the outset: ‘Does China have a well calcu-lated strategy, and capability, to displace the traditional Western players in the region for its own national security...?’ The book focuses particularly on China’s long-term strategy, its ‘Grand De-sign’, and how the Pacific Islands region fits into it. There is some discussion of China’s growing economic impact in the region but little comment on the role in the region of Chinese private or state-owned businesses — or fraudsters. It is inevitable that as China’s presence grows, so will some undesirable elements, per-haps gradually replacing Western con-men. (In the 1980s, this reviewer shared the Funafuti Hotel in Tuvalu with a group of Ku Klux Klansmen who were intent on persuading the — fortunately unpersuadable — minister of finance to invest Tuvalu’s reserves with them.)

Yang has no doubt that China’s approach to the Pacific Is-

lands region forms an ‘integral part’ of Beijing’s grand strategy. He takes issue, however, with those in the West who tend to view China’s grand strategy in solely or predominantly security terms. He sees it rather as ‘maintaining a peaceful international environ-ment that allows China to build the economic and technological foundations necessary to become a rich and powerful country’. But Yang acknowledges the largely negative impact on the region of competition for diplomatic support in the recent past between Beijing and Taipei. Clearly that could recur if relations between the two should worsen. More generally, Yang acknowledges that ‘China’s influence in the South Pacific is likely to keep growing, which means continuing implications for the evolution of the re-gional order’.

But he sees no likelihood of immediate changes. Positive at-titudes in the Pacific Islands region towards Australia and New Zealand, based on historic and demographic links, will contin-ue to make them influential for the foreseeable future. And even though the region may no longer be described strategically as an American lake, ‘the cultural reservoir of goodwill towards the United States, established during World War II, still remains’. There are no indications of any present military interest in the South Pacific on the part of Beijing. This could, of course, change if future strategic competition between Washington and Beijing in the wider Asia–Pacific region should boil over. Observers of security in the Pacific Islands region will therefore keep a wary eye on developments to the north.

Traditional aid donors in the region may not be wholly relaxed about China’s different approach to aid: principally its opposition to conditionality and its preparedness to fund large infrastructure projects. But at least there seems no inclination to try to resist changes which flow inevitably from China’s increasing power in the wider Asia–Pacific region. China, New Zealand and the Cook Islands recently announced a joint China/New Zealand aid pro-ject to provide water mains on the island of Rarotonga. Although a small project, it is significant as China’s first joint aid project in the Pacific and as an indication of New Zealand’s wish to co-op-erate with China in the Pacific.

Pacific Islands countries are adjusting readily to China’s in-creasing role and influence in their region, not least Beijing’s unconditional aid and its willingness to invest in infrastructural projects. Recalling the days of early European colonisers, major power competition in the region and the era of independence for many Pacific peoples, the late Epeli Hau’ofa of Tonga wrote: ‘Conquerors come, conquerors go, the ocean remains, mother only to her children.’

MICHAEL POWLES

TO CAGE THE RED DRAGON: SEATO and the Defence of Southeast Asia, 1955–1965

Author: Damien FentonPublished by: NUS Press, Singapore, 2012, 330pp, US$30.

As Damien Fenton notes in the introduction of To Cage the Red Dragon, SEATO — the South East Asia Treaty Organisation — is a blindspot in the post-war history of the Asian region. Formed



in 1954–55 in the wake of the French defeat in Indo-China,SEATO was a US-led collective security alliance against the fur-ther spread of communism in the region. Other SEATO members were the United Kingdom (then the colonial power in Malaya), France, Australia, New Zealand, Thailand, the Philippines and Pakistan (which at that time included modern-day Bangladesh). But under the terms of the 1954 Indo-China peace settlement, SEATO membership was off-limits to the states most at risk from communist expansion — South Vietnam, Cambodia and Laos. The political consensus underlying SEATO proved to be short-lived. It was unable to respond to the resurgence of conflict in In-do-China in the early 1960s and was relegated to bystander status during the Vietnam War. The fall of Indo-China to communism in 1975 left SEATO, in Fenton’s words, with the ‘inescapable taint of failure’.

To Cage the Red Dragon provides a valuable counterpoint to this received view. The book follows the first half of the alliance’s existence with a particular focus on the military planning that lay at its heart. Drawing on Australian, New Zealand and British ar-chives, Fenton, a military historian at the New Zealand Ministry for Culture and Heritage, paints a detailed picture of SEATO’s military planning processes and its plans for the defence of the treaty area. He argues cogently that, while SEATO did not have standing forces, it was the ‘pre-eminent forum for the co-ordi-nation of Western defence and strategic planning for the region’ and an important channel for the United States to influence the military doctrine and force structure of its regional allies.

Fenton explains why SEATO military planners, haunted by the memory of Chinese intervention in the Korean War, focused first on the threat of conventional invasion by China and North Viet-nam. The allied forces required to meet these contingencies were enormous, leading inevitably to a discussion within SEATO of the role of nuclear weapons. Fenton’s account of the interaction be-tween SEATO planning and US and UK nuclear strategies for the Asian region is one of the book’s highlights. There is also good cov-erage of other dilemmas faced by the military planners, including the tricky business of securing force commitments from the allies and managing Pakistan’s concerns about an attack from India.

Fenton then turns to SEATO’s planning to counter communist insurgency tactics, which the alliance confronted first in Laos in the early 1960s and which were later to prove so debilitating in Viet-nam. SEATO’s planning for intervention in Laos, though never im-plemented, was unable to keep pace with the kaleidoscopic shifts in

the country’s domestic pol-itics, which were exploited by communist groups to secure control of large ar-eas. Fenton describes how the difficulty in securing collective agreement to a SEATO response in Laos led the United States to-wards a more flexible ‘co-alition of the willing’ in Vietnam, and ultimately to the demise of SEATO itself in 1977.

To Cage the Red Drag-on has particular relevance for the history of New

Zealand engagement in South-east Asia. While the ANZUStreaty of 1951 symbolises New Zealand’s post-war alliance re-lationship with the United States, from the mid-1950s to mid-1960s much of that alliance relationship played out through SEATO, which had the added benefit from New Zealand’s per-spective of involving its principal security partner at that time, the United Kingdom. In bringing together the United Kingdom and the United States, SEATO provided the strategic framework for New Zealand’s ‘forward defence’ policy in the region, to which Commonwealth (including New Zealand) forces based in Ma-laya and Singapore were committed. Against the background of the United Kingdom’s withdrawal from a military role in South-east Asia in the 1960s, Fenton shows how SEATO played an im-portant part in pulling New Zealand and Australia towards the United States and into the Vietnam War. While SEATO was not a player in the Vietnam conflict, the Holyoake government cit-ed New Zealand’s obligations under the SEATO treaty to justify New Zealand involvement, making the alliance a favourite target for the New Zealand anti-war movement.

To Cage the Red Dragon focuses on the military aspects of the alliance, but it should be noted that there were broader aspects to SEATO’s work, including its political machinery and the vexed question of the alliance’s role in providing economic assistance. While overall very accessible, the text assumes some knowledge of military terminology, and retains SEATO’s (now archaic) spellings of Chinese place names that may be unfamiliar to some readers.

Without access to Vietnamese and Chinese records it is de-batable whether SEATO deserves the credit Fenton gives it for deterring a communist invasion of Thailand, thereby buying time for that country’s political and economic development. However robust and significant SEATO’s military planning may have been, it was ultimately no substitute for the wider problems of credibil-ity which the alliance faced. In this regard To Cage the Red Dragon provides new and valuable insights into the military and strategic thinking behind collective defence in South-east Asia in the 1950s and 1960s.

MARK PEARSON



The 60th anniversary of New Zealand–Japan relations was marked in Tokyo on 1 August by a Track 2 dialogue between the NZIIA (led by the director) and its Japanese counterpart.

On 16 August Trade Minister Tim Groser opened a series of talks on improving international governance (jointly run by the NZIIA and the Institute for Governance and Policy Studies) with a presentation on the multilateral economic agenda. Two weeks later Dr Alan Bollard, retiring governor of the Reserve Bank, spoke on the international financial sector. On 6 September MFAT’s Amanda Ellis spoke on governance and development followed a week later by Dr Adrian Macey (IGPS) on global governance of the environment. Dr Graham Hassall of VUW’s School of Gov-ernment rounded up the presentations in September with a talk on governance of the Pacific.

On 5 September the NZIIA co-hosted with the New Zea-land Contemporary China Research Centre a major symposium to mark the 40th anniversary of the establishment of New Zea-land–China diplomatic relations. Held in the Legislative Council Chamber in the old Parliament Buildings, it featured a diverse group of twenty lead speakers and panelists. They came from ac-ademia in China and New Zealand, media in New Zealand and elsewhere, research institutes, private enterprise and the political community. A reception hosted by John Hayes MP, the chair of Parliament’s Foreign Affairs, Defence and Trade Select Commit-tee, followed the symposium. (A report on proceedings and the prime minister’s opening address are to be found elsewhere in this issue.) Preparations are in hand for a reciprocal event hosted by the Chinese Academy of Social Sciences to be held in Beijing to-wards the end of this year.

AucklandThe following meetings were held:6 Aug Dr Ashok Sharma (Department of Political Studies,

Auckland University), ‘India’s Strategic Engagement with the United States and the Emerging Global Order’.

16 Aug Professor Zhu Feng (Peking University’s School of In-ternational Studies and Sir Howard Kippenberger chair in strategic studies, Victoria University of Wellington), ‘China’s North Korea Policy in the Post-Kim Jong Il Era’.

ChristchurchOn 22 August Dr James Kember, New Zealand’s ambassador to the African Union and to the Federal Democratic Republic

INSTITUTE NOTES

of Ethiopia, addressed the branch on ‘New Zealand and Africa: Time to Lift our Engagement’.

Hawke’s BayOn 22 August Commander Robert Green RN(rtd)(New Zea-land Disarmament and Security Centre) addressed the branch on ‘Where Next for Nuclear Disarmament?’

WairarapaWith Jane Williamson’s departure, John Schnellenberg has re-sumed the role of acting branch secretary. On 26 July new NZIIA director Peter Kennedy addressed the branch on ‘Europe: Who is in Charge?’

WellingtonThe following meetings were held:31 Jul HE Yong-kyu Park (Republic of Korea ambassador),

‘The Korean Peninsula and Korea–New Zealand Rela-tions’.

12 Sep Dr Ashok Sharma (Department of Political Studies, University of Auckland), ‘Tectonic Shifts in the Global Power: From the US–India Strategic Partnership Per-spective’.

The Track 2 dialogue in Tokyo on 1 August 2012

CORRIGENDAIn the last issue (vol 37, no 5) we inadvertently described female Dr Mona el Farra’s gender as male on page 4 and Lord Dubs’s name was mis-spelled on page 8.


(Issue number in bold)

ARTICLES

BARROSO, José Manuel Durão, ‘Building Europe–New Zealand links’ 1,11BELLAMY, Paul, ‘A cautious start [NZ–North Korean relations]’ 6,8BUTCHER, Andrew, ‘Benign neglect: New Zealand, ASEAN and South-east Asia’ 6,21CHANDRAMOHAN, Balaji, ‘Fighting the logic of inviolable state sovereignty’ 4,15 —— ‘India and New Zealand: strengthening ties’ 1,20GOFF, Phil, ‘The Israeli–Palestine dispute: time for compromise’ 5,2GOODMAN, John, ‘States of mind: Micronesia and the Pacific’ 6,17GRIFFITHS, Lois and Martin, ‘The Palestine story: to exist is to resist’ 5,4GROSER, Tim, ‘Stoking the engine of growth’ 6,12KAMPMARK, Binoy, ‘The Syrian dilemma’ 3,2KATZ, Mark, ‘What would a democratic Russian foreign policy look like?’ 2,2KENNEDY, Peter, ‘Whither Brussels?’ 2,11KEY, John, ‘A strengthening China–New Zealand link’ 6,5—— ‘Finding a way in a changing world’ 5,10LYNCH, Brian, ‘Celebrating a half-century Korea–New Zealand link’ 4,21—— ‘China–New Zealand ties: a timely focus’ 6,24——‘Facing big issues’ 3,26McCULLY, Murray, ‘A warming US–New Zealand relationship’ 4,6—— ‘Seeking a Security Council voice’ 5,14McGHIE, Gerald, ‘Economic and foreign policy issues facing New Zealand: some reflections’ 5,22—— ‘Interacting in a globalised world’ 3,6—— ‘Interests and values in foreign policy: a practitioner’s view’ 1,7McGIBBON, Ian, ‘Missing in North Korea’ 1,24—— ‘The US–New Zealand alliance: a tale of six anniversaries’ 4,2McINTYRE, W. David, ‘Will the People’s Commonwealth come into its own?’ 1,2NEUMAN, Michaël, see MAGONE, ClaireNICHOLS, Peter, ‘Helping Papua New Guinea’s diplomats’ 4,19O’BRIEN, Terence, ‘Facing harsh truths and finding a way’ 4,9—— ‘Finding a way on a three-dimensional chessboard’ 3,21PARSONS, Nigel, ‘The Arab world’s shifting ground’ 1,14POWLES, Michael, ‘China and New Zealand at forty: what next’ 6,2RICKETTS, Rita, ‘Africa is rising’ 3,13SATO, Yoichiro, ‘Protecting Tonga’s maritime security’ 5,17SHERWIN, Murray, ‘Fat, smart, poor and contented?’ 2,15SHLAPENTOKH, Dmitry, ‘China and Belarus: the grand plan’ 1,18SMITH, Anthony, ‘Reassessing 9/11’ 2,22STOCZYŃSKA, Beata, ‘Poland leads Europe’ 3,17THOMSON, Scott, ‘Rough water — a British naval perspective’ 2,18WALKER, Scott, ‘What have we learned about forced democratisation? 3,9WEISSMAN, Fabrice, see MAGONE, ClaireWIRAJUDA, Hassan, ‘Democracy and diplomacy’ 2,7

BOOKS(Reviewer’s name in brackets)

BAHADU, Jay, Deadly Waters: The Hidden World of Somalia’s Pirates (Robert Patman) 5,27BEAL, Tim, Crisis in Korea, America, China and the Risk of War (Ian McGibbon) 2,29BERGEN, Peter, The Longest War: The Enduring Conflict Between America and Al-Qaeda (Anthony Smith) 2,22BILAL, Sanoussi, Philippe de Lombaerde and Dianna Tussie (eds), Assymetric Trade Negotiations (Stephen Hoadley) 6,29BURKE, Jason, The 9/11 Wars (Anthony Smith) 2,22CHAUDRON, Gerald, New Zealand in the League of Nations, The Beginnings of an Independent Foreign Policy, 1919–1939 (Ian McGibbon) 3,30COOLSAET, Rik (ed), Jihadi Terrorism and the Radicalisation Challenge:

European and American Experiences (Anthony Smith) 2,22DE SOYZA, Niromi, Tamil Tigress, My Story as a Child Soldier in Sri Lanka’s Bloody Civil War (Anthony Smith) 4,25DEMICK, Barbara, Nothing to Envy, Love, Life and Death in North Korea (Paul Bellamy) 1,27ELBARADEI, Mohamed, The Age of Deception: Nuclear Diplomacy in Treacherous Times (Robert Ayson) 3,31FENTON, Damien, To Cage the Red Dragon: SEATO and theDefence of Southeast Asia, 1955–1965 (Mark Pearson) 6,30FIRTH, Stewart, Australia in International Politics: An Introduction to Australian Foreign Policy (3rd edition) (Anthony Smith) 5,28FRANCIS, Andrew, ‘To Be Truly British We Must Be Anti-German’, New Zealand, Enemy Aliens and the Great War Experience (Ian McGibbon) 5,30GERGES, Fawaz A., The Rise and Fall of Al-Qaeda (Anthony Smith) 2,22GUARDIOLA-RIVERA, Oscar, What if Latin America Ruled the World? How the South Will Take the North into the 22nd Century (Brian Lynch) 4,27HAGAR, Nicky, Other People’s Wars, New Zealand in Afghanistan, Iraq and the War on Terror (Ron Smith) 1,30HASSALL, Graham, see LYNCH, BrianHASSIQ, Ralph, and Kongdan Oh: The Hidden People of North Korea, Everyday Life in the Hermit Kingdom (Paul Bellamy) 1,27HODGE, Nathan, Armed Humanitarians: The Rise of the Nation Builders (Beth Greener) 3,29HOFFMAN, David E., The Dead Hand: Reagan, Gorbachev, and the Untold Story of the Cold War Arms Race (Stephen Hoadley) 1,26HOFFSTAEDTER, Gerhard, Modern Muslim Identities: Negotiating Religion and Ethnicity in Malaysia (Anthony Smith) 5,26KATZ, Mark N., Leaving without Losing, The War on Terror after Iraq and Afghanistan (Anthony Smith) 6,28 KELSEY, Jane (ed), No Ordinary Deal: Unmasking the Trans-Pacific Partnership Free Trade Agreement (John Ballingall) 2,28KISSINGER, Henry, On China (Brian Moloughney) 4,24LARSON, Erik, In the Garden of the Beasts, Love, Terror, and an American Family in Hitler’s Berlin (Ian McGibbon) 1,29LOMBAERDE, Philippe de, see BILAL, SanoussiLYNCH, Brian, and Graham Hassall (eds), Resilience in the Pacific: Addressing the Critical Issues (Neil Plimmer) 2,31MAGONE, Claire, Michaël Neuman and Fabrice Weissman, Humanitarian Negotiations Revealed: The MSF Experience (Roderic Alley) 5,29McCARGO, Duncan, Mapping National Anxieties: Thailand’s Southern Conflict (Anthony Smith) 5,26MEARSHEIMER, John, Why Leaders Lie: The Truth About Lying in International Politics (Russell Harding) 4,28MEEHL, Gerald A., One Marine’s War: A Combat Interpreter’s Quest for Humanity in the Pacific (Ian McGibbon) 4,26MNOOKIN, Robert, Bargaining with the Devil: when to negotiate, when to fight (Anthony Smith) 1,31OH, Kongdan, see HASSIQ, RalphNEUMAN, Michaël, see MAGONE, Claire SHAHZAD, Syed Saleem, Inside Al-Qaeda and the Taliban: Beyond Bin Laden and 9/11 (Anthony Smith) 2,22TRIPODI, Paolo, and Jessica Wolfendale (eds), New Wars and New Soldiers: Military Ethics in the Contemporary World (Bruce Harding) 2,32TUSSIE, Diana, see BILAL, SanoussiWEISSMAN, Fabrice, see MAGONE, ClaireWOLFENDALE, Jessica, see TRIPODI, PaoloYANG, Jian, The Pacific Islands in China’s Grand Strategy: Small States, Big Games (Michael Powles), 6,29

MISCELLANEOUS

Correspondence: 3,32 (Ted Woodfield); 4,29 (Gray Southon); 5,33 (Gray Southon) Institute Notes: 1,32; 2,33; 3,33; 4,30; 5,31; 6,32Obituaries: Sir Frank Wakefield Holmes Kt 1,33; Sir Brian Edward Talboys CH, KCB, AC, PC 4,33

INDEX TO VOLUME 37

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