The Clark Government's Foreign Policy Legacy: David McCraw Predicts Continuity in New Zealand's Approach to International Affairs
McCraw, David, New Zealand International Review
Recent Labour governments, such as Kirk's and Lange's, have been most notable in foreign affairs for their actions in the fields of disarmament and human rights. The Kirk government is identified with cancelling the 1973 Springbok tour and with sending a frigate to protest French nuclear tests at Mururoa, while the Lange government is best known for its port ban on nuclear-weapons-carrying ships. The Clark government's legacy is different: undoubtedly its most significant accomplishments in foreign affairs were in the trade field.
Probably the greatest foreign policy achievement of Clark's term was the conclusion of a free trade agreement with China last year. The results from this will be some time coming, but the long-term benefits for New Zealand could be enormous. New Zealand lives by trade and its prime foreign interest must be the reduction of protectionist barriers to our exports. Ideally, these reductions would come as the result of World Trade Organisation negotiations, but in the absence of progress at the Doha Round New Zealand has looked to agreements with individual countries or groups of countries as substitutes.
China is our fourth largest market and it has the potential to become our biggest. Both Helen Clark and the current Trade Minister, Tim Groser, have suggested that China will eventually overtake Australia as our number one customer, possibly in twenty years. (1) With an economy that is still growing, Chinas middle class is expanding and acquiring a taste for our products. However, China had tariffs averaging 15 per cent on most of our agricultural products (raw wool being an exception). Tariff-free trade with China after the agreement is in full effect will, it is estimated, add somewhere between $200 million to $400 million annually to our income.
Helen Clark said on a number of occasions that she wanted New Zealand to be the first developed nation to achieve a free trade agreement with China and she succeeded in making it happen. This deal gives New Zealand a jump start on its competitors in that market.
The Labour-led government also completed the groundwork for a free-trade deal between Australia and New Zealand and the ten nations of ASEAN--the Association of South East Asian Nations. Collectively, this, too, is a major market for New Zealand that has potential to develop greatly. Agreement to begin negotiations was reached in 2004 and the final agreement was signed this year by the National-led government. New Zealand had already completed bilateral deals with two ASEAN members--Singapore and Thailand.
With these deals alone, New Zealand has plugged itself into the major region of world economic growth and greatly enhanced our economic security. One of the reasons for pushing these agreements is to avoid New Zealand's being shut out of markets if our trading partners decide to sign preferential trading agreements with our competitors.
Thirdly, the Clark government began to create the nucleus of an Asia--Pacific free trading bloc by constructing the Trans Pacific Strategic Economic Partnership (known as the P4). This 2006 agreement between New Zealand, Singapore, Chile and Brunei is intended to attract other members of APEC into a quality free trade agreement which will fulfil the promise that APEC originally had of being the vehicle of regional economic integration. The P4 had as its base the bilateral economic agreement New Zealand had signed with Singapore in 2000, and it was decided at the APEC meeting that year to expand this to include Chile. Chile was looking for better access to Asia and the Pacific, whereas New Zealand saw Chile as an access point to the South American market via joint ventures and strategic alliances. After negotiations began in 2003, Brunei decided to join the partnership.
It was hoped that the United States and Australia would become interested, and last year the United States suddenly indicated that it would like to enter negotiations. …