NEW ZEALAND AND CHILE: A Thwarted Friendship

By O'Meagher, Matthew | New Zealand International Review, March 2000 | Go to article overview

NEW ZEALAND AND CHILE: A Thwarted Friendship


O'Meagher, Matthew, New Zealand International Review


Matthew O'Meagher suggests that New Zealand and Chile are older friends than is often supposed and urges a resumption of earlier efforts to get closer together.

In the early 1970s both the New Zealand and Australian governments wanted to encourage Chilean imports into their countries. This would help Chile to earn the revenue which would enable it to remain a promising market for their own exports. They were not the only actors seeking to bolster trade between the Tasman neighbours and Chile, however, and nor was trade the only element of the rich and promising early relationship which formed between the two smaller partners in this Pacific triangle.

From the time of a visit from Chilean buyers to New Zealand in November 1969, the business communities of New Zealand and Chile had tried to promote two-way trade by sending commercial missions to each other. But whereas the Chilean importers' visit aroused `great enthusiasm' among New Zealand exporters in search of new markets, a reciprocal visit by New Zealand importers to Chile two years later was less successful. It was so hurriedly arranged by Chile's honorary consul in Auckland that the visiting team left with the impression that Chile could not export the products New Zealanders might want to buy. Chilean exporters remained ignorant of what those products might be.

The dramatic trade gap in New Zealand's favour was not created by the differing results of these two missions alone, however. While Chile opened up to New Zealand's dairy exports, New Zealand refused at first to allow Chile to bring in the fishmeal it was keen to sell here. Even more significantly, only one firm (a Chilean affiliate of the US multinational Continental Grain) offered shipping arrangements between Chile and Australasia -- and it concentrated at first on sending Chilean produce to Australia, with New Zealand exports being carried on return voyages.

In spite of these impediments, Ambassador Riethmuller, Chile's first Ambassador to New Zealand, believed that New Zealand as well as Australia held opportunities for Chilean exporters. In conversations he had with New Zealand's most senior ministers in mid-November 1971, he detected extraordinary goodwill towards his country, on account of the speed with which it had moved to take 11 per cent of New Zealand's global dairy exports. As proof of this goodwill, Chile received after his visit a quota of $100,000 -- three times the previous highest amount New Zealand had given a developing country -- to bring in samples of Chilean products which might attract New Zealand consumers and thus stimulate imports.

Such was the New Zealand authorities' wish to reciprocate Chile's embrace of its exports, in fact, that it even put aside its subsequent annoyance (and the fury of New Zealand wine-makers) at the decision of Chile's honorary consul in Auckland, Jose Ibieta, to use the bulk of this concession to import Chilean wine. After promises from Riethmuller that Chile would keep its promise this time to use the quota to import a wide range of products, a similar quota was issued in 1972, even though no country had received a second quota before.

The two sides continued to explore opportunities for further economic linkages. In 1972 a senior official and a veterinary expert from Chile's ECA made visits to make additional meat and dairy purchases, and Ibieta -- before being relieved of his duties in September -- fielded inquiries from New Zealanders wanting to train Chilean agricultural experts, buy Chilean steel and nitrates, send to Chile items such as tinned fish and provide consultancy expertise. After Norman Kirk became Prime Minister, moreover, New Zealand also sent a technical assistance adviser to Chile in July 1973 to see if any projects there could qualify for support from New Zealand's increased foreign aid budget,(1) In the same month officials from the two countries also discussed the practicalities involved in sending each other new trade missions at the end of that year. …

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