New Zealand’s geopolitical friendly fire has its limits

The gloves are off.

That might seem to be the undertone of surprisingly tough talk from New Zealand’s foreign and trade ministers.

Winston Peters, the foreign minister, may be facing legal action after making allegations about former Australian foreign minister Bob Carr on Radio New Zealand.

Carr had made highly critical comments about Pillar II of the Aukus pact, which New Zealand is contemplating joining, at a conference held by New Zealand’s Labour Party opposition in Wellington in mid-April.

Meanwhile, trade minister Todd McClay has engaged in some plain speaking of his own. In a press release on Thursday, McClay called Canada’s refusal to comply with a ruling in New Zealand’s favour on ‘tariff rate quotas’ by the disputes settlement body of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) ‘cynical’ and ‘disappointing’.

The minister said he was seeking legal advice, as New Zealand had ‘no intention of backing down’.

Canada has been allocating a large share of its preferential duty quotas for dairy products to its own domestic processors. This has heavily limited the ability of lower-cost exporters such as New Zealand to enter the Canadian market.

To outsiders, it might seem surprising that Australia and Canada are on the receiving end of the remarks made by the New Zealand ministers. All three countries are members of the Five Eyes – and Australia is New Zealand’s only formal ally. And New Zealand Prime Minister Christopher Luxon sought out his counterparts from both Australia and Canada in December and February to issue joint statements on Gaza.

However, the exceptions probably prove the rule.

Bob Carr is from the same Labor Party as Australian Prime Minister Anthony Albanese. However, no love appears to be lost between Carr and the current Australian Labor Party leadership when it comes to foreign policy issues. In 2021, Albanese was heavily critical of an internal party motion supported by Carr which called for a boycott of Israel.

In trade, the picture is more complex. It is true that New Zealand, where there is largely a bipartisan consensus on the merits of free trade, has a long track record of speaking up for itself when it feels hard done by – even against close partners.

Most famously, this included successfully taking a World Trade Organization (WTO) dispute in 2007 against Australia over the country’s long-standing de facto ban on importing New Zealand apples. The WTO case is now largely forgotten. When it is remembered, it usually as a technocratic measure that did not affect wider bilateral relations.

Indeed, New Zealand’s other previous WTO cases have mostly been against other Western countries with which it has generally had improving relations – including Canada, the European Communities and the United States.

Over the years, New Zealand governments have openly expressed frustrations and trumpeted successes on the trade front. However, as trade issues increasingly become entangled with wider geopolitical concerns – witness the rise of ‘friendshoring’ in arrangements such as the US-led Indo-Pacific Economic Framework (IPEF) – this general approach may be changing.

For example, New Zealand largely kept quiet after the WTO ruled in 2022 that US steel and aluminium tariffs introduced under the Trump administration contravened the rules of the global trade body. When pressed in a media interview, then trade minister Damien O’Connor would only say ‘it is an anomaly in what is otherwise a very positive and valuable relationship’.

New Zealand is a third party to WTO disputes against the metals tariffs lodged by other countries. Moreover, the case was an important point of principle: the US refused to comply with the ruling, citing a national security exception in the dispute settlement process. The issue also helps to explain why the United States continues to block the appointment of judges to the WTO’s Appellate Body.

No real progress was made on the dispute settlement issue at the WTO’s Ministerial Conference in Abu Dhabi in February, at which Todd McClay served as deputy chair. But McClay avoided mentioning the failure in his press release after the event, instead focusing on successes such as an extension to a moratorium on digital duties (for which McClay had led negotiations) and a string of bilateral meetings.

In other foreign policy areas, too, Wellington is being careful about how and when it raises its voice.

At times, New Zealand has openly expressed frustration with Israel over its actions in Gaza. For example, foreign minister Winston Peters used social media to condemn the Israeli strike that killed seven aid workers for the World Central Kitchen charity on 1 April. And Christopher Luxon, the Prime Minister, soon followed this up by calling the strike ‘utterly unacceptable’.

On the other hand, both Peters and Luxon were less responsive about the Israeli strike on Iran’s embassy in Damascus the same day. The incident was particularly significant because diplomatic missions are normally deemed to be sacrosanct under the 1961 Vienna Convention.

When pressed in a radio interview on 16 April, Peters said: ‘Of course we condemn that action now, because it’s actually illegal, but the other point is that there were countless actions from the other side well before that and on an ongoing basis. But shouting out who’s wrong here will not help.’

The Damascus precedent became even more pertinent after Ecuadorian authorities raided Mexico’s embassy in Quito on 5 April – an action which did bring condemnation and a warning from New Zealand for ‘states to uphold their obligations under the Vienna Convention on Diplomatic Relations’.

Another example of careful wording could be found in Winston Peters’ speech to the UN, in which Peters decried the use of the veto in the Security Council – but carefully avoided naming and shaming the countries responsible.

Doing so might have been uncomfortable, given that the United States has used its veto power three times since the war in Gaza began in October. Peters is currently trying to align New Zealand more closely with the United States in other foreign policy issues and met with US Secretary of State Antony Blinken shortly after making his speech in New York.

This also sheds light on why New Zealand appears to have kept quiet about the US view that the UN Security Council resolution adopted in March which calls for a ceasefire is ‘non-binding’.

Still, amongst the gloom, there is always a silver lining.

For example, even the overall challenging WTO summit in February provided opportunities for valuable facetime. For trade minister Todd McClay, these included Saudi Arabia and the host United Arab Emirates (UAE), two countries with which New Zealand is currently seeking to do more.

Last week, McClay travelled to Dubai to continue talks on a Comprehensive Economic Partnership Agreement (CEPA) with the UAE. He also went to Riyadh, the Saudi capital, in an attempt to make headway on stalled free trade negotiations with the wider six-member Gulf Cooperation Council and to build ties with Saudi Arabia itself.

New Zealand is still very much capable of finding its voice – when it wants to.

But increasingly, Wellington is choosing to be more careful with its words.

Geoffrey Miller is the Democracy Project’s geopolitical analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian. He is currently working on a PhD at the University of Otago on New Zealand’s relations with the Gulf states.

This article was originally published on the Democracy Project.

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