Speech to New Zealand Institute of International Affairs, Parliament – Annual Lecture: Challenges and Opportunities

Good evening –

Before discussing the challenges and opportunities facing New Zealand’s foreign policy, we’d like to first acknowledge the New Zealand Institute of International Affairs. You have contributed to debates about New Zealand foreign policy over a long period of time, and we thank you for hosting us.

Can we also welcome the Dean and members of the Diplomatic Corps. You are critical enablers for advancing your countries’ interests, and ours, and we thank you for your work here in Wellington. As mentioned when we met late last year, the Coalition Government respects each of you as representatives of governments that chart their own independent foreign policies.

Distinguished guests, for this evening’s speech, we thought to begin at the height of the Covid pandemic in 2020.

Shut off from the world and amidst pervasive global uncertainty, we tasked senior officials in the Ministry of Foreign Affairs and Trade to put their minds to the foreign policy challenges that would emerge post-pandemic.

It was a useful exercise as it placed our daily conduct of foreign policy, at the height of a global crisis, into a wider context. It also gave us a sense of how the world would re-emerge post-Covid.

The resulting advice alerted us to the heightened foreign policy challenges that would emerge, challenges that have been borne out since.

It confirmed worrying trends that if we look even further back, over several decades, become even more disconcerting.

Back when first Deputy Prime Minister, in the mid-1990s, New Zealand benefited from a strategic environment and an international system that was delivering for us and our interests.

The world was becoming more open, more democratic, and more free. We enjoyed effective multilateral institutions. There was impetus for trade liberalisation and a liberal oriented rules-based system.

But these foundations, which underpinned New Zealand’s foreign, trade and economic policies in decades past, have seismically shifted in the first quarter of the 21st Century.

Over the past 25 years, we have witnessed a rolling back of democracy, increasingly restrictive market barriers, and an increase in conflict.

These deteriorating trendlines take us further away from past assumptions about the global environment that New Zealand is operating in. Sadly, these negative trends have only accelerated over the last three years.

Challenges: A More Fractious World

The challenges we face are stark, the worst that anyone today working in politics or foreign affairs can remember.

Russia’s illegal invasion of Ukraine casts a pall over Europe, causing death, destruction and misery, and food and energy insecurity. Russia’s continuing actions are a direct and shocking assault on the rules-based order by a permanent member of the UN Security Council.

When recently in Warsaw we met with Ukrainian refugees and were moved by their personal experiences about the war, and of the comfort they have felt from welcoming Poles.

Poland, alongside its NATO partners, underscored to us the alliance’s strong commitment to collective security. Our discussions with counterparts at the NATO Foreign Ministers’ meeting, and in bilateral meetings in Warsaw, Brussels, and Stockholm, revealed that member states have seriously lifted defence spending and their commitment to respond collectively to Russian aggression.

Finland and Sweden’s entry into NATO is the result of a serious miscalculation by Russia. It is also a manifestation of two previously longstanding neutral states recognizing that collective security is now necessary to face the current security threat.

We also have the utter catastrophe that has unfolded in Gaza, a misery caused by both Hamas’ monstrous terrorist attacks on 7 October and the now overwhelming nature of Israel’s response.

We remain deeply concerned that miscalculation by either Israel or Iran could widen the conflict and divert the world’s gaze from where it most needs to be: the urgent need for a permanent ceasefire, release of hostages, and unimpeded flow of humanitarian aid into Gaza.

New Zealand and the international community strongly support the current efforts by Egypt, Qatar, and the United States to broker an immediate ceasefire in Gaza in exchange for the release of Israeli hostages.

Gaza has dominated our discussions with counterparts since coming into office. We have heard a full spectrum of opinions, and the strong message from the international community is for Israel, Iran, and Iranian proxies to pull back from the brink.

Our recent statement at the United Nations General Assembly on this subject reflected this widely shared view, as well as our growing impatience because the humanitarian crisis in Gaza is far too urgent, as is the fate of Israeli hostages, for a further cycle of escalation and recrimination.

In Egypt, President Gheit of the Arab League and Egypt’s Foreign Minister Shoukry raised with us New Zealand recognizing Palestinian Statehood. They spoke of this recognition providing a durable pathway to peace in their region.

We agree that the international community, and indeed New Zealand, recognizing Palestine as a state and admitting it as a full member of the United Nations is historically inevitable. A Palestinian state is an integral part of New Zealand’s long-held position in support of a two-state solution, and we view  this as a ‘when, not if’ question.

That said, we don’t consider now – in the middle of the current crisis – to be the optimal time to progress the statehood question.

De-escalation, a permanent ceasefire, releasing hostages, and relieving the humanitarian crisis are the needs of the moment, and we risk diverting the world’s attention and energy away from them if we launch head-long now into a complicated debate about Palestinian Statehood.

Such a debate could potentially complicate the called-for crisis response we and the international community are urging upon all parties in Gaza.

Closer to home, in the Indo-Pacific, we confront the situation of North Korea’s emerging nuclear capability, in flagrant breach of international law and UN resolutions. Its aggressive rhetoric and escalating ballistic missile tests directly attack the rules-based order.

We are also concerned by North Korea, Iran and China supplying military related technologies to Russia or supporting its industries to fuel its illegal invasion of Ukraine. No responsible international citizen should be helping Russia to invade and retain another country’s sovereign territory.

Looking southwards, with 80 percent of our annual exports to the Indo-Pacific and over one third of all global shipping transiting the South China Sea, safe navigation is of critical importance for our trade-dependent country.

The United Nations Convention on the Law of the Sea (UNCLOS) provides the legal basis for managing overlapping claims of sovereignty. And so the tensions we see there are another example of the rule of law, and maritime security, being recklessly and unnecessarily challenged.

The Blue Continent, of which New Zealand and our Pacific Island family and neighbours are an integral part, also faces more sustained strategic competition and challenges than at any time during the past 80 years. Some island nations also face an existential threat from climate change.

The Pacific region’s strategic environment is not benign, far from it. Remorseless pressure is being exerted across it as beachheads are sought and influence peddled.

Overall, we see three big shifts in the international order:

  • From rules to power, a shift towards a multipolar world that is  characterized by more contested rules and where the relative power between states assumes a greater role in shaping international affairs.
  • From economics to security, a shift in which economic relationships are reassessed in light of increased military competition in a more securitised and less stable world.
  • And from efficiency to resilience, where we see a shift in the drivers of economic behaviour, and where building greater resilience and addressing pressing social and sustainability issues become more prominent.

The shifting ground presents challenges for New Zealand. They also reveal the truism that the global geostrategic and security challenges faced in one era do not remain static.

Eighty years ago, New Zealanders were scattered around the globe fighting the second of two ruinous world wars.

Forty years ago, we had started to see the emergence of a freer, richer, more democratic world – in which far more peoples had a direct say over how their societies were run.

Now, the world in 2024 is different to either 1944 or 1984. And geostrategic theories and foreign policy fundamentals conceived in the 1980s look as outdated to the leaders of today as those of 1944 would have looked in 1984. The world has changed, and so must we.

Indeed, each generation of decision-makers confronts new challenges as economies, demographics, technologies, and societies evolve, as do the power calculations that accompany disruptive change.

Benign becomes malign. Old truths give way to new ones. The trick now, as it was then, is to have one’s eyes wide open about the fundamental shifts that are taking place and be nimble enough in government, and through government support systems, to adapt to them.

Opportunities: Realising New Zealand’s potential

Turning now to the opportunities we see. After three years of foreign policy incoherence and concerted drift under Labour, our Cabinet endorsed early in its term a foreign policy reset that would reinvigorate and focus our foreign, defence and trade policy agendas.

We have since coming into government pursued with vigour a foreign policy that:

  • Significantly increases its focus on, and resources applied to, South East Asia and India. 
  • Re-engages and reinvigorates our relationships with traditional and like-minded partners.
  • Sustains our deep focus on the Pacific and re-energizes the 2018 Pacific Reset by working with Pacific leaders and through the Pacific Islands Forum to bolster development and security cooperation across the Pacific.
  • Targets multilateral engagement to global or transboundary issues where we have direct interests or where core New Zealand values and freedoms are at stake.
  • Navigates impasses or blockages in the multilateral system to support new groupings of like-minded partners that can more efficiently advance and defend our interests and capabilities.
  • Promotes the Coalition Government’s goal of effecting a serious step change in export value over the next decade through active economic diplomacy to fuel export growth.

To achieve this ambitious agenda, we knew we needed to give more energy, more urgency, and sharper focus to three inter-connected lines of effort:

  • Investing in our relationships.
  • Growing our prosperity.
  • And strengthening our security.

We have from day one hit the ground running because we had a lot of ground to make up. We wanted New Zealand’s voice to be heard by the world again. During the first five months of this term as Foreign Minister, we’ve visited 14 countries, and engaged with over 60 at home and abroad, covering the vast majority of New Zealand’s export markets and its diplomatic partnerships.

This engagement as Foreign Minister has supported the similarly vigorous programmes of engagement conducted by the Prime Minister, Minister for Trade Todd McClay, Minister of Defence Judith Collins, and several other Cabinet colleagues.

We are prosecuting with vigour and a real sense of urgency our foreign policy reset because we want to place New Zealanders in the best possible position to achieve the prosperity and security we all aspire to. These engagements, however, do not represent activity for activity’s sake.

Rather, this broad pattern of engagement allows us to better understand regional and global challenges and crises from multiple perspectives.

The war in Ukraine and the catastrophic situation in Gaza are two cases in point and they have certainly been a strong feature of our foreign policy discussions over the past five months.

We have also heard loud and clear from our nearest friends in the Pacific their climate, economic and security concerns.

In March we were delighted to host China’s Foreign Minister, Wang Yi. While an innately complex relationship, we celebrated with China 10 years since the bilateral relationship was elevated to a Comprehensive Strategic Relationship. 

With tariff free access for our dairy products into China secured, our economic relationship continues to flourish.

We welcomed the positive and frank discussions we had with Wang Yi, both on issues we agreed on, and those we did not, and look forward to further engagements with China this year and over the term.

Through our vigorous diplomatic engagement we have shown traditional and like-minded partners, and those who New Zealand has neglected for too long, that the New Zealand Government is back internationally and ready to forge more active, more mutually advantageous relationships.

Our strategy is simple. Given the golden age of trade liberalization has passed, the Coalition Government is committed to making incremental trade and economic gains and creating opportunities – large or small – everywhere.

We believe these will, over time add up and allow our exporters to grow their existing markets while also diversifying into new ones.

As we move our initial focus on action and re-engagement to creating more opportunities for export growth and economic outcomes, there are some lessons learned from the first phase of our foreign policy reset.

Small states matter.

Our meeting with United Nations Secretary-General Antonio Guterres confirmed that small states like New Zealand do matter. We are for instance highly respected by the United Nations’ leadership for our long-held and consistent opposition to the use of the Security Council veto.

New Zealand is thus well placed to assist the UN with any future reform of the Security Council and its veto powers. Reforms that are sorely needed.

Our positive reception in New York reinforced the equal respect in which nations are held. We are all equals, a first principle that drives the conduct of this Government’s foreign policy with nations big and small.

Fundamentally, New Zealand is respected because of its values and the consistent expression of them across governments and across time. But this reputational capital has to be nurtured by each fresh generation of decision makers. We cannot rest on our laurels.

A second lesson from our first five months of international engagement is, and to emphasize an earlier point, that global and regional security has never been more important.

Here New Zealand needs to ask hard questions of itself. As we seek a more secure region and world, are we doing our share? Across Europe, in South East Asia, and across Pacific Rim countries, nations are stepping up to play their part in defence arrangements.

So must we because it is a key metric of how others judge us, a point made clear repeatedly during our first five months of engagements. New Zealand’s long history of parsimony when it comes to defence cannot hold if we wish to continue garnering respect from, and influence on, others.

As a number of traditional and like-minded partners have accentuated to us in these troubled times, contributing to global and regional security is not a luxury, it is a necessity given the number and severity of challenges faced across the Indo-Pacific, Europe, and the Middle East.

Third, diplomacy matters. At this moment in time the ability to talk with, rather than at, each other has never been more needed. Our programme of engagements reinforces that those who share our values, and even those who do not, gain from understanding each other’s position, even when we cannot agree.

From understanding comes opportunity and from diplomacy comes compromise, the building block of better relations between nations. We need more diplomacy, more engagement, more compromise.

The next step in the pursuit of our foreign policy goals is to maintain urgency while becoming forensic about where we can achieve the best gains in terms of enhancing both our security and prosperity.

Supporting this effort will require whole-of-government leadership to follow through on promises and commitments made. It should be noted that the Department of Prime Minister and Cabinet, the Ministry of Foreign Affairs and Trade, the Ministry of Defence and the New Zealand Defence Force are all in various stages of leadership transition.

Once bedded in, new leadership across these core parts of our national security system will help better align responsiveness and capability with the expectations and goals of the Coalition Government.

There is much work to do and with new, stable leadership soon in place we will be better able to deliver.

AUKUS Pillar 2 and the nature of New Zealand foreign policy

We now turn to the confused public debate around AUKUS Pillar 2.

There has been much said about New Zealand’s possible involvement, so let’s begin by laying out some basic facts.

Discussions amongst officials began in September 2021 and the first advice from officials to Ministers about the potential for New Zealand to associate with AUKUS began in October 2021.

In 2023, after almost two years of careful consideration, Labour’s Prime Minister, in concert with his Ministers of Foreign Affairs and Defence, sanctioned officials to begin discussions with AUKUS partners about Pillar 2’s scope and architecture.

Exploratory, information-gathering discussions in Canberra, London, and Washington did not spontaneously occur.

Officials were mandated to conduct them by the Labour Government. That choice was consistent with former Prime Minister Hipkins’ statement last year that, “Our region is now a strategic theatre.”

It was also consistent with New Zealand’s nuclear-free legislation, which all of our significant political parties continue to support.

So, let’s be clear. Pillar 2 discussions were initiated by Labour, before the current Coalition Government was voted into office. That is why we state we are continuing a process already begun by our predecessor Labour Government.

Second, there is one crucial precondition and one consequential decision required before New Zealand could or would participate in Pillar 2.

The precondition is that AUKUS partners need to want us to participate in Pillar 2 and invite us to do so.

That precondition has not yet been met, which is why we are exploring with our traditional partners the scope of Pillar 2 and seeking a much more detailed understanding of what this involves.

Indeed, it is not yet fully clear to us what criteria AUKUS partners will use when considering the participation of new countries in Pillar 2.

This government, like its predecessor, has its Ministers and officials seeking information and in discussions with their counterparts so that we can better understand what opportunities and benefits Pillar 2’s advanced technologies may offer New Zealand.

We must also carefully examine what utilities, if any, we might offer, or be expected to offer Pillar 2 partners, in return. That will take time.

The consequential decision, if the precondition of being invited to participate in Pillar 2 is met sometime in the future, is New Zealand would then need to want to do so.

At that future point we will need to carefully weigh up the economic and security benefits and costs of any decision about whether participating in Pillar 2 is in the national interest.

The Government is a long way from this point of being able to make such a decision.

But we should emphasise that it would be utterly irresponsible for any government of any stripe to not consider whether collaborating with like-minded partners on advances in technology is in our national interest.

We have equities with our one formal ally Australia that means we need to understand what the Pillar 2 architecture means for our closest defence and indeed diplomatic relationship.

For instance, if Australia adopts new advanced technologies what does that mean for New Zealand’s ability to communicate with our ally’s capabilities?

It would be irresponsible for us not to consider whether the $3.5 billion of taxpayer money spent, which former Minister of Defence Ron Mark and we secured in 2018, to purchase four P-8A Poseidon aircraft and replace our antiquated Hercules fleet with five new Hercules aircraft, will still be fit for purpose under Pillar 2’s technology advances.

Prudence also dictates exploring technological advancement to assess its potential significant benefits for our economy, military and space sectors, and how these benefits might then flow into wider society.

That is why former Prime Minister Chris Hipkins, and his Cabinet colleagues, were open to exploring Pillar 2’s opportunities. Now, it seems, not so much.

Openness in government is transforming before our eyes into close-mindedness in opposition.

We are disquieted by any potential breakdown in foreign policy bipartisanship over Pillar 2. Bipartisanship in foreign policy is not a luxury for our small state, it’s a necessary condition for advancing our sovereign interests effectively, thereby keeping New Zealanders secure and prosperous. We urge them to hold their nerve.

We also believe, given our information gathering is still in its early stages, that critics and commentators are well ahead of where the government presently sits in relation to Pillar 2.

And we have listened to those critics who reject Pillar 2 outright, before even being in possession of the basic facts. They are entitled to their view, but we do challenge their reasoning.

Critics also possess a luxury we do not. They can paint the darkest picture of Pillar 2 and make ignorant assertions about the nature of the strategic environment, liberated by not knowing what they don’t know.

The Coalition Government, in contrast, is constrained in its ability to properly respond to such ignorance because of what we do know but can’t say to safeguard the conduct of our foreign policy.

Thus, wild rhetoric about New Zealand acquiring hypersonic weaponry and New Zealand facing no threats to its security are repeated by journalists and commentators who should better appreciate this fundamental information imbalance.

Pillar 2 is not a military alliance but a technology sharing mechanism being developed by three of our closest traditional security partners. It is being developed as a response to a deteriorating strategic environment. It seeks to strengthen defence capabilities, deter coercion or aggression in our region, and support security and stability.

And let’s also be clear about which governments comprise Pillar 2: three of our closest friends on the international stage. Indeed, Pillar 1 partners comprise a US Government led by Democrat Joe Biden, a Labour-led Australian Government, and a Conservative Government in the United Kingdom, supported by the Labour opposition. These are the countries that opponents of Pillar 2 are scaremongering about.

Critics claiming New Zealand and the region face no security threats also ignore any number of reports and statements – like the Defence Policy and Strategy Statement and the National Security Strategy, or attribution statements about foreign interference – published under successive New Zealand Governments about specific and wider security threats. 

The critics also seriously impugn those agencies, and the dedicated people who work in them collecting and analysing intelligence about the security challenges our country, region, and the wider world face.

Now intelligence is never perfect, we know that, which is why Ministers take responsibility for making decisions on foreign and defence policy, and on matters of national security.

By example, there was a massive intelligence failure in the early 2000s, one which prompted a former New Zealand Prime Minister to declare the country existed in an “incredibly benign strategic environment” even as planning was well advanced for the 9/11 terrorist attacks.

We also note that full intelligence sharing with the United States only resumed in 2009.

The critics are, sadly, out of date. They should respect, whether it was the last Labour Government or the current Coalition Government, that we take our security responsibilities as seriously as they once did.

There is also, we believe, an ideological element underpinning the critics outright rejection of Pillar 2 and their claim that we are abandoning an independent foreign policy.

Their conception of our independent foreign policy has always carried a strand of anti-Americanism, so being independent means for them saying no to the United States.

There is an old saying that nostalgia is the most seductive of liars. We think some of the critics are seduced by old battles, and projecting those onto the Pillar 2 debate.

But they ignore, consciously or otherwise, the fact that we now exist in a qualitatively new and different economic and security environment from years past.

We also say that if independence for our country’s foreign policy means sometimes disagreeing with our traditional and like-minded partners, but somehow does not involve also being at liberty to agree with them at times to pursue shared and mutual interests, then the term independence is utterly meaningless.

New Zealand’s independent foreign policy does not, and never has, meant we are a non-aligned nation, although that is the way some critics in politics and the media see it.

We have always had our foreign policy alignments. We picked sides in the two world wars of the 20th Century. We have a military alliance with Australia.

We have an intelligence partnership with four other Western, English-speaking countries. We have defence arrangements with a number of South East Asian partners. We build coalitions of interest across any number of issues. For New Zealand, to be independent is not to be neutral or non-aligned.

Independence is about having the agency to freely make decisions, in any direction, consistent with well-considered, prudent assessments of New Zealand’s vital national interests.

Finally, critics of our foreign policy argue there has been a dramatic shift since the change of government. In this we agree with them.

We’ve shifted from drift to re-engagement.

From inertia to action.

From lethargy to energy.

And from incoherence to coherence.

We take the world as it is, and this realism is a shift from our predecessors’ vaguer notions of an indigenous foreign policy that no-one else understood, let alone shared.

The threats New Zealand face, outlined this evening, are incredibly challenging. But the government sees opportunity too, and we will continue to pursue each of them with vigour.

However, we are steadfast in our belief that New Zealand’s voice matters, that within the community of nations we stand as equals, and that more than ever, diplomacy matters.