• Don McKinnon
Foreign Affairs and Trade

Christchurch Branch of the New Zealand Institute for International Affairs

It was Harold Wilson who famously said "A week is a long time in politics". Looking back over the decade, I can add from personal experience that not only have the last nine years seemed very long, but also very dramatic in world affairs.

It's a very "millennial" thing to do to take a look at the past, and reflect on what has happened.

I came into my foreign affairs portfolio back in 1990.

What did the world look like then? How did New Zealanders see their place in it? How did the outside world view us? Have we changed and matured in our outlook over this time?

I believe we have.

New Zealand is ready for the challenges for the challenges of the 21st century. We are accepted and valued both in the region and globally as an active and engaged player.

But we have had to work hard and strategically to achieve this.

Our membership of the United Nations Security Council and our commitment to peacekeeping showed us playing our part in global political and security issues. Closer to home, we have been involved in mediation to resolve regional conflicts - in Cambodia, in Bougainville, recently in the Solomon Islands and currently in East Timor.

Through our active support for APEC, which draws together our economic and strategic interests, we have been able to reinforce our identity in the Asia-Pacific region. As a global trader, we have been working tirelessly in the WTO to improve the global trading system.

I'll be interested in your views on New Zealand's evolution in foreign and trade policy terms over the last decade, and the way we have been able to respond to shifts in our economic and security environment.

In my view, we have been deft in responding to a decade of change. I take pride from the fact that over the last nine years, New Zealand foreign policy has been active, independent and effective.

Tonight I will reflect on where we have come in terms of our foreign policy and outline our current priorities. I will also look ahead to some of the challenges we have to grapple with during the next decade.

An expanding foreign policy agenda

The foreign policy agenda gets more complex and more crowded with each passing year.

We face many questions:

- What role will the United Nations play?
- What will come out of the next WTO round?
- How will regional groups develop and where New Zealand will fit in?
- How will Pacific neighbours cope in a rapidly globalising economy?
- How will we tackle transboundary problems - whether it's the drugs trade, marine resources or climate change?
- How can we best prepare ourselves for the future- what skills and diplomatic resources will we need?

The world in 1990

To help us find ways to deal with the future, we must take into account the past.

Tonight, let's look at the world, as I found it when I took up my portfolio at the end of 1990. That year saw the reunification of Germany, the release of Nelson Mandela from prison and the invasion of Kuwait by Iraq.

During my first year as Foreign Minister we saw the defeat of Iraq, South Africa's repeal of its last apartheid laws, and the end of the old Soviet Union. An intensified war developed in Yugoslavia and a peace agreement was signed for Cambodia. The Maastricht summit paved the way for the next stage of European integration through European Monetary Union.

In my early days as foreign minister, the Gulf crisis was at the top of the international agenda and in 1991 New Zealand joined in the UN sanctioned multinational operations in the Gulf. We sent military aircraft and a medical unit, because of our belief in the responsibilities of international citizenship. These were important decisions as they showed to the rest of the world that New Zealand was re-engaging.

New Zealand's re-engagement

It deeply concerned me, when we came into government in 1990, that New Zealand seemed to be slipping off the world's radar screen. Our international image had become a confused and ambiguous one. We were seen as idealistic, some would have said naive and even arrogant. We were inclined to extreme positions and probably a bit hard to read.

Our values and principles still generally identified us with the western alliance, but we were no longer part of ANZUS. Outsiders did not all share an equal admiration for our anti-nuclear policy and many - including those we counted as our close friends - saw it as self-indulgent. They wondered what we stood for, and whether New Zealand would again be prepared - as we had been in the past - to respond to a crisis like that in the Gulf.

Our readiness to do so showed that we would continue to give practical support to the United Nations to help in defending the sovereignty of small nations against aggression. From then on, New Zealand became more actively involved in UN peacekeeping and demining operations. This peaked in 1995, at the high point of the UN's peacekeeping involvement, when we had 398 personnel overseas - in the Middle East, in Africa, in Yugoslavia, in Cambodia.

We carry into our foreign and trade policy our national values of fair play, honesty and equality. We want to stand up for the world's unjustly treated minorities and the victims of regional conflict. That is why there is such strong community support for conflict resolution and for peacekeeping operations.

Most people understand that this calls for real soldiers with real equipment.

I don't want to exaggerate the mood I detected in the community back in the early 1990s, but I felt we had become introspective and self-absorbed.

We were also being defined by our relations with the United States. This was brought home to me when I met other Foreign Ministers, Presidents and Prime Ministers for the first time. One of their first questions was always "how are your relations with the United States?".

Meanwhile, around us the world was changing. The cold war had ended, and economic growth in East Asia was about to boom. Ironically at a time when we could least afford to have our heads in the sand, when we were being challenged to respond to an increasingly complex international environment we had withdrawn.

To quote from an American strategic assessment that struck home when I first read it:

We live in the midst of a still unfolding revolution in international
affairs. It began with the unexpected collapse of the Soviet Union.
This revolution is virtually certain to continue for decades.

If we were going to keep a place for New Zealand in the mainstream of this fast changing world, the real challenge was to re-engage. In a way which would allow us to develop linkages with the new groupings emerging, such as APEC.

At the same time to reinvent our image and our links with traditional partners who had been undergoing their own transformations - the new look European Union, for example.

We had to look to fresh horizons too. The Focus on Latin America initiative I took in 1996 turned the attention of policy makers and business people toward that part of the world. This initiative is now picking up momentum. Political contact between New Zealand and Latin America has burgeoned and we are setting in place the building blocks for trade, business cooperation, education and people to people contacts.

The changing policy environment

There have been many important attitudinal shifts in New Zealand society in the last decade. I want to consider just three of these

- our attitude to Asia
- globalisation, and
- democratisation

all of which condition community views on foreign and trade policy.

Attitudes to Asia

The Asia literacy of the great majority of New Zealanders a decade ago was limited. Although he later became a passionate advocate of closer links with Asia, Paul Keating, former Prime Minister of Australia, reportedly once said that Asia was the place you flew over on the way to Europe. Many New Zealanders would have agreed.

We still have some distance to go, but we have come a long way in a short time. Opinion polling shows that there is now a real and visceral understanding of the economic and political importance to New Zealand of our relations with Asia. In some exposed sectors, the impact of the Asian economic crisis brought that home the painful way, through the loss of jobs and tourism.

Similarly, New Zealand's image around Asia is a much more multidimensional one now than it was in the past. We must continue to work hard at projecting an accurate image of the kind of society we are - through active diplomacy, through business links, academic exchanges, contacts between organisations like your own and building bridges at community level.

One of my central messages over the years has been that I wanted Asian peoples and New Zealanders alike to recognise that geographically, we are all part of the same neighbourhood. I wanted New Zealanders to be as familiar with Jakarta and Tokyo as they are with London or Los Angeles. That is why I established the Asia 2000 seminars in 1992 which developed into the Asia 2000 Foundation. I believe it has done a great job in raising Asia awareness. Getting the Foundation up and running has been one of the successes which has given me most satisfaction.

It is in part due to the Asian 2000 Foundation's stimulus that our links to Asia are growing more sophisticated and continuing to gain critical mass. Our attitudes toward Asia are more realistic and less stereotyped. We now have the maturity of outlook, and an easy dialogue with our Asian partners, to carry us into the 21st century.


I don't mean to suggest that globalisation is a new phenomenon, but it is affecting us more and more.

Most of us accept that the information and technology revolution is changing almost every aspect of our daily lives; the way we work, do business and even governments' capacity to control what comes in from the outside world. We can aim to harness these forces for our benefit but we can't stop them. There are advantages for a once isolated society like New Zealand in being drawn closer, electronically at least, to the rest of the world.

Of course all change brings uncertainty and resistance, and there are some negative effects from globalisation. Some people feel threatened by its pressures on a small and open economy and society. They fear loss of cultural identity and control over our own destiny. They fear that trade liberalisation will lead to loss of jobs - and in some uncompetitive sectors this will unfortunately be the result. They want to put up the shutters.

No doubt we shall hear a lot more from this corner of the community over the weeks leading up to the APEC Leaders' meeting.

The third influence of the policy making environment is what I shall term the democratisation of foreign and trade policy, once the nearly exclusive preserve of Ministers and their advisers. By democratisation I mean the greater propensity for the community to want to and expect to influence foreign and trade policy. In part as a result of the "CNN effect" - images from the evening news generating demand for an instant response. Governments (not mine, of course!) can find themselves pushed into a faster reaction than is always consistent with sound policy making.

For all its inconveniences, I welcome this process of democratisation and wider participation in policy making. We in New Zealand see ourselves as an educated and outward looking society. Our foreign and trade policy is an extension of our values and identity, and of our domestic policies. It follows that there should be a place for wider community consultation and even involvement of interested groups in policy making.

In a small society, the pool of expertise on any given subject is necessarily limited, and we need to be able to draw on the best resources we have. But equally, I expect those groups and individuals who want to insert themselves into policy making to ensure that they are fully informed and prepared for genuine debate. Sustaining broader debate on foreign policy issues of importance to New Zealand is no easy task, and we are not always well served by our media outlets, which are often dominated by two dimensional stories.

It is a tribute to NZIIA that you have been able to sustain this debate, for so many years and in so many centres. But there is still a long way to go.

What has New Zealand achieved in world affairs?

Perhaps it is a Kiwi characteristic that we don't like to dwell too long or too loudly on our successes. But in the foreign and trade policy field we have many achievements to be proud of. I want to pick out three highlights, each very different in nature.

These examples come first to mind because they have shown New Zealand on the international stage as committed to helping resolve problems. They have shown us as successful in our diplomacy, creative and resourceful. As capable of the lateral thinking which is usually needed to solve any complex situation. And as being guided by principles which underlie the international rule of law, and confidence in multilateral systems.

The first is New Zealand's membership of the Security Council. You know the story and I don't want to repeat history but rather to reflect on what this experience did for New Zealand. Both in the way we see ourselves on the world stage and the way others view us.

During our campaign, opinion was divided on whether we should run a low-key campaign or an aggressive, more public one. Those who thought we might lose opted for the former. But my political instincts told me our approach should be New York or bust. We had the credentials and it was worth going out on a limb.

When it came to a "wrap up" assessment in 1995, at the end of our two year term, we naturally asked ourselves whether it had all been worthwhile. How successful had we been in meeting the goals we set for ourselves in 1991 before we began the campaign for membership? These bear repeating. They reflect the bedrock values of our foreign policy.

The first however, was cast in negative terms because at that time we had some image mending to do:

- reversing international perceptions of New Zealand as a country
with an isolationist approach to global political and security issue

The second was

- to reinforce our credentials as a country with a genuine Asia-Pacific commitment

and the third goal was

- to demonstrate in practice principles which New Zealand has traditionally articulated; independence, the importance of collective security for small states, the need for a stronger and more democratic UN system and the rule of law in international relations

We judged at the end of our term that we had more than met these objectives, and that we had certainly reversed any negative views of New Zealand. We had shown an active and independent approach to issues before the Council. This was particularly strongly welcomed by our friends in the Asia-Pacific region.

Our then Permanent Representative put the sage reminder in his final report that such an asset was only of temporary value. Memories would dim and the credits earned would erode over time. Unless that is, we were able to build from our new international profile, to sustain our reputation by continuing to take an active role in collective security and UN efforts to deal with problems. Wise words, and I believe we have been able to do just that, both globally and in our own part of the world.

Restoring Peace on Bougainville

Take New Zealand's role in restoring peace on Bougainville, on which you were addressed last year. Our initiative put an end to a war which had been going on for nearly a decade, on which previous efforts to bring peace had failed. It took a lot of "Pacific time" and talking, much of it here in Christchurch. Bougainville remains a high priority, and requires a special, even non-conventional, approach.

Just a couple of months ago the process appeared to be bogging down. I hosted a meeting for some thirty Bougainvillean leaders. They arrived barely speaking to each other, so we arranged for them to spend a few nights on a marae on Matakana Island. Sharing the same room soon re-established communication and we got a breakthrough. Unconventional but successful.

Not all the disputes we get involved in have to do with politics and security. We have also had some important breakthroughs in dealing with trade disputes. New Zealand's economic security depends on our ability to defend our interests as a global trader. We rely on the rule of law in the World Trade Organisation, just as we do in the United Nations. In my time as Minister of Foreign Affairs and Trade, I have seen the WTO's dispute resolution procedures put in place.

This was one of the crowning achievements of the Uruguay Round. It has set up a new conceptual basis for dealing with trade disputes. It gives equal protection to smaller and less economically powerful countries, which is a definite improvement on the old GATT rules.

Since the new system was set up in 1994, New Zealand has on five occasions resorted to WTO dispute resolution, in each case after all efforts at resolving the problem bilaterally with our trading partner had failed. On two occasions, our case has been heard by the panel which has ruled in New Zealand's favour. One of these was the Special Milk Classes case against Canada. The other was against India's quantitative restrictions on agricultural, textile and industrial products.

On two other disputes the problem was settled before going to a panel. And on the most recent, our spreadable butter case against the EU, New Zealand was able to present its case before a panel. This led the EU to seek an amicable resolution which we are now close to finalising.

I do not want to tempt fate, but so far we have not lost a case.

A few years ago we would hardly have dared to take the EU to the GATT, nor would we have had much hope of succeeding. Under WTO rules we still consider very carefully before going to dispute procedures, but when New Zealand is put in a position where commitments we have negotiated have been broken, we have little choice. The WTO dispute settlement procedure, as an objective and rules based system, gives protection to small states taking action. And it allows us to quarantine a trade dispute as far as possible from the broader relationship.

However, it seems to be our experience that as soon as we solve one problem, we encounter another. Here in Canterbury, famous for its lamb, you will have been following with special attention the depressing news from Washington that the US has imposed tariffs on lamb imports from New Zealand and Australia. Again, this is an issue which the Government has made it clear we will take to the WTO.

"Unfinished business"

Mention of the United States brings me to reflect briefly on what we have been able to achieve in this relationship over nearly a decade. It was one of my priorities, when I took up the portfolio, to get New Zealand back to a suitable level of re-engagement with the United States. In 1990, New Zealand's Ambassador in Washington was not even received at senior levels. My first meeting with Acting Secretary of State, Larry Eagleburger, was pretty tough. Over time, and a lot of diplomacy, things have built up to the point where relations with my current counterpart, Madeleine Albright, are excellent.

Change has been slow but change has been for the better. The Clinton administration early in its term reviewed the constraints at that time still imposed on New Zealand, as a consequence of our anti-nuclear policy. A more thoughtful policy was applied and our access at the senior level was restored.

These have been difficult years to traverse. The resentment felt in US defence circles over what many saw as New Zealand's utopianism, in opting out of ANZUS responsibilities and going anti-nuclear, has been deep and long lasting. We have found the phrase "unfinished business" appropriate to signify the areas of profound difference between New Zealand and the US over nuclear policy. Differences which both sides have come to recognise are based on deeply held domestic beliefs.

Despite the many demonstrations we have given of our good international credentials and our readiness to work alongside the US in times of security threat, we have not until recently been able to move forward on the defence and security side of the relationship. While the shadows of the immediate post-ANZUS period have been long, I believe there is now renewed goodwill toward New Zealand in the National Security Council and the Pentagon.

If we set to one side the current trade dispute and consider the full sweep of our relationship with the US, I am confident that we can look ahead to a more positive period. The political relationship now has more substance than at any recent time. Secretary of State Madeleine Albright visited New Zealand last year. The Prime Minister was warmly received in Washington in January. Last month, the Minister of Defence held the first meeting for 20 years with a US Secretary of Defense. Later this year we shall have the first visit to New Zealand by an American president since Lyndon Johnson came here in 1966, more than thirty years ago.

Basically it would be an expensive luxury not to continue to develop a substantial and productive relationship with our second largest trading partner and the world's only military and economic superpower.

We have "unfinished business" of a different kind with Australia but here I refer to the agreement between our Prime Ministers to set up a joint task force. Its mandate is to resolve those few remaining areas of CER which have stayed stubbornly in the "too hard" basket, and to look for ways to tackle ongoing irritants in the relationship.

It can be a national sport to knock Australia, but I take the opposite view. Of course we will always have differences of approach, but in a tight corner there is no other country we can rely on to the same degree. Australia can confidently feel the same way about us.

In trade and economic terms the statistics speak for themselves. New Zealand's exports to Australia have increased by a staggering 314% since CER was signed in 1983. We have worked side by side with Australia in resolving regional conflict. We have shared the same ambitions for APEC and for building other regional architecture, such as the ASEAN Regional Forum to introduce a security dialogue.

Give or take the shape of a few vowels, we speak the same language and share the same values. That New Zealand should enter the new millennium with its Australia relationship strong and still growing is one of our most strongly held foreign policy objectives.

And with over 700 000 "movements" between Australia and New Zealand each year, New Zealanders and Australians should never underestimate the value to us both of the Trans Tasman Travel Arrangement - which provides for visa-free movement between the two countries. New Zealand is the only country in the world to which Australia accords this privileged access.

Future challenges

Looking back to 1990 and considering how few of the international events which have preoccupied me were predicted is a brisk reminder of the limits to forward planning. Indeed, who could have foreseen an event like the unintended bombing of the Chinese embassy in Belgrade? Or the Lockerbie tragedy? Nuclear tests in India and Pakistan?

This by way of a caveat before I attempt to look ahead, to sketch in some of the many challenges which we can expect to have to meet. I shall pick up four themes:

- New Zealand's place in the world
- Responding to globalisation
- Regional responsibilities
- Relationship building.

New Zealand's place in the world and how we define it is not a new question or preoccupation. Dipping into "Unofficial Channels" I found some scholarly musings on the subject in correspondence in 1953 between Frank Corner and then Secretary of Foreign Affairs Alister McIntosh. Corner was weighing up the strategic case for New Zealand to commit itself to South East Asia as opposed to tying up defence forces in the Middle East. Defining ourselves is a dynamic process - it changes with our perceptions of the outside world, and we have just come through one of those periods of shifting perceptions.

These days we are clear about where New Zealand fits. We have finally made ourselves at home in the Asia-Pacific region, but this grouping is still a work in progress. It does not have the cultural coherence of the EU or the geographical logic of NAFTA. The very concept of an Asia-Pacific community is a relatively recent one, which has been most clearly expressed through APEC. The solidarity we have achieved is still fragile, though, and will need a lot more nurturing if we are to bridge the many differences in values, levels of development and political systems in our region.

Globalisation brings a whole clutch of issues onto our forward agenda (indeed we are already grappling with many of these). What should be the role of the United Nations family in future? We argue that because of the pressures of globalisation and the explosion of cross border issues, we need to have an effective United Nations system to set rules and standards to which countries will feel some degree of commitment. Environmental diplomacy, which aims to address such issues as marine pollution and global warming, depends on such a framework.

Whether governments like it or not, globabalisation will continue to open up international trade, and to provide new stimuli through electronic commerce and the internet. The drive for trade liberalisation over recent years has recognised this, and aimed for growth by riding with the tide rather than against it. There are now some worrying signs that support for trade liberalisation may be faltering, on the threshold of a new WTO round. The challenge over the next three or four years will be to keep moving forward. Globalisation will not allow us to put up the shutters for a tea break.

One interesting effect of the Asian economic crisis has been to shatter some old ways of thinking and to encourage a more lateral approach. I think it significant that two of our top trading partners in North Asia - Japan and Korea - are now rethinking their previous opposition to free trade agreements. They are both exploring the possibility of FTAs with South American trading partners. New Zealand will have to be similarly alert to new groupings. Even now we cannot take it for granted that others in our region will automatically think of including New Zealand when new arrangements are being set up. It will be a continuing challenge for our diplomacy to make sure that no opportunities pass us by.

In the next century, I can foresee that our regional responsibilities are likely to become more demanding and require a heavier resource commitment. At this very moment, our longstanding expressions of support for the UN settlement negotiations on East Timor are being translated into contributions of police, armed services personnel, electoral experts and observers for the UN Mission in East Timor, which is preparing the way for next month's referendum.

We can expect to go on being engaged in conflict resolution, in helping to smooth political or constitutional crises, in addressing emergencies based on ethnic or resource tensions. In our nearest neighbourhood, the South Pacific, the combined effects of globalisation and rapid social and demographic change are difficult to digest. We may see more situations like the recent one on Guadalcanal arising from competition for land.

But our regional responsibilities also extend to ensuring that our neighbours are equipped to enter the new millennium - whether this involves health projects under ODA in the northern Solomons, assistance with disaster relief in a cyclone-afflicted atoll, fisheries management, or simply how to deal with the policy and the practical consequences of being a member of the WTO or the UN.

I want to speak briefly about relationship building and our focus for the future. This is fraught with all the pitfalls of writing the guest list for a family wedding. By picking out only two rapidly changing relationships by way of example, I shall risk offending the great majority who are not mentioned I any detail. I hope they will understand the logic of my selection.

There is no doubt that China will emerge as a more dominant presence, even though it may be decades away from global power status. The role China plays in our region - constructive and cooperative or unpredictable and troublesome - will be a key determinant of the stability of New Zealand's immediate neighbourhood. I have seen China play a constructive part in the ASEAN Regional Forum, and I am confident it will continue to do so.

China is at a delicate point in its emergence at present, with an ambitious reform programme of unprecedented scope well advanced but not completed. It is still knocking at the WTO door, which we hope will be opened this year - despite the recent setbacks. For New Zealand, our relationship with China is growing strongly and deserves to be one of our top priorities over the next few years. We are about to experience tourism from China, and student numbers are rising rapidly. Relations with China are well developed at the government level, but we shall soon see a surge