PM Jacinda Ardern (2nd left) and Australia Prime Minister Anthony Albanese (3 left) are escorted into last night's Australia New Zealand Leadership Forum dinner by the Forum's two chairs; Greg Lowe (NZ) and Pip Marlowe (Australia)

Prime Minister Jacinda Ardern’s major foreign policy speech yesterday ended up leaving some key questions unanswered.

Perhaps that was more obvious because she made the speech in Australia, the United States’ closest ally in the Indo-Pacific region.

Her refusal to argue against China playing a role in the Pacific was hardly likely to win applause from some more hawkish elements in Canberra.

Indeed there were even some in the elegant surrounds of Sydney’s Lowy Institute, where she made the speech, who raised their eyebrows at her unwillingness to commit to either side in the intensifying west against China contest in the Indo-Pacific.

At the same time, Australian Ministers and business executives speaking under Chatham House rules at the Australian New Zealand Leadership Forum were making it obvious that the Albanese government wants a thaw in the currently frozen relationship with China.

But ultimately, Australia’s business relationship with China comes second to its assessment of its strategic position in East Asia.

One Minister told the Forum that getting the United States back into the region would be very important.

“This region is going to be very important, trying to get them engaged and trying to ensure that the Pacific islands not only remain free and strong but that we get the economic prosperity that’s been of so much benefit to our two countries spread throughout this region,” the Minister said.

It is that Australian endorsement of the United States’ implicit security guarantee to the Pacific that Ardern appeared to distance herself from in her speech as she argued that New Zealand and the Pacific were “family.”

“Ultimately, rather than increased strategic competition in the region though, we need instead to look for areas to build and cooperate, recognising the sovereignty and independence of those for whom the region really is home,” she said.

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“And so while we each maintain our independence, and New Zealand certainly does, we are part of a family, one that is incredibly important to us and central in our decision making.  

“When expressing the principles of an independent foreign policy in this way, the principles of cooperation, of values and place, it would be easy to give the impression of a nice and tidy matrix from which we make decisions.

“The honest reality is that the world is bloody messy.

“And yet, amongst all the complexity, we still often see issues portrayed in a black and white way.

“This is one of the challenges to an independent foreign policy.

“It is also a challenge for all those who seek peace and stability through dialogue and diplomacy – at a time when there is so little room for error and misunderstanding.

POLITIK PM Jacinda Ardern with the Lowy Institute’s Director of Research Hervé Lemahieu in a question and answer session at the institute yesterday.

Nevertheless, she was challenged by the Lowy Institute’s Director ofi Research, Hervé Lemahieu, about the two countries’ different relationships with the United States and China.

“Has New Zealand underweighted geopolitics, or has Australia overweighted geopolitics?” he asked.

“I would say neither,” she replied.

“In the face of different challenges, we’ll often share the same concerns, but we may, at any given time, take a different political approach to an issue.

“But that doesn’t diminish our acknowledgment of those concerns or those issues that we face.”

Lemahieu also challenged her over her attendance at the recent NATO summit at which leaders declared China to be a threat to peace for the first time, “warning that Beijing’s ambitions and coercive behaviour is a major challenge to the group’s interests.”

“And different governments, including those that you have visited in the last few weeks, have warned that Russia’s invasion of Ukraine has a direct parallel with China’s potential ambitions for Taiwan. Do you agree with those assessments?” he asked.

Ardern did not address the first part of the question; whether China was a threat to peace, but she did address the second on Taiwan.

“In broad terms, we should not immediately apply what we’re seeing in Europe, and just blanket say that this is the trajectory of other geostrategic issues that we’re seeing in our region,” she said.

“That is the kind of example of this very black and white narrative that I don’t think allows us to then continue to engage in a dialogue and diplomacy that we need at this time.”

It is her reluctance to engage in the kind of bellicose anti-China rhetoric that Australia’s former Prime Minister, Scott Morrison, and his Government engaged in that may be one of the reasons Ardern has such a high profile in Australia.

The Lowy Institute last week released its annual poll on Australian attitudes to the world, and Ardern easily topped the list of world leaders in whom Australians have “a lot of confidence”; she was on 58 per cent, followed by France’s Emanuel Macron on just 15 per cent.

And New Zealand topped the poll when Australians were asked who was the country’s best friend in the world, with 57 per cent saying it was us and 26 per cent saying it was America.

This huge hold on Australian public opinion is a powerful diplomatic weapon for New Zealand and gives Ardern room to differ from Australia over China and the United States.

She might also find that though the Australian Government may have firm views on China she might get some support from Australian business on this approach.

An Australian speaker at the Forum said other Asian countries had for a long time been managing geopolitical tensions with China at the same time as they had been building trade.

“So perhaps this is something we could learn from them.

“We can’t really change China’s policies towards us, but we can continue to focus on what we’re good at, which is building frameworks to encourage cooperative behaviour on policy making in the region.

“The key thing is building back some trust and offering ways to resolve trade issues in the future.”

And a New Zealand delegate said big countries could arm wrestle with China and throw their weight around over trade.

“But us smaller countries have to use our diplomacy,” the delegate said.

“And it was really great to hear our Prime Minister say recently that we needed to use diplomacy and really have those close relationships.”

POLITIK Fonterra CEO Miles Hurrell with Trade Minister Damien O’Connor

New Zealand’s economic dependence on China does tie the Government’s hands when it comes to dealing with geostrategic issues involving China.

But primary produce exports make up 81.8 per cent of all New Zealand’s merchandise exports, and thirty-seven per cent of those primary produce exports go to China.

The next largest market, the US, takes only 10 per cent.

Foreign Minister Nanaia Mahuta has responded to this by repeatedly calling on New Zealand business to diversify away from China.

It is not, therefore, surprising that the meat and dairy industries in New Zealand have expressed considerable disappointment at the European Union – New Zealand Free Trade Agreement proposal announced  last week which gave them very little increased access to the EU market.

New Zealand negotiators have defended the deal saying they were up against impossible odds, a small country that didn’t matter to Europe trying to beat its powerful farming lobby.

But the consequences could be to limit the primary industries’ ability to diversify away from China.

Fonterra CEO, Miles Hurrell, who is at the Forum, speaking outside the trade session, told POLITIK that he was worried that other trade deal negotiations could be compromised by the fact that New Zealand had accepted a low deal in Brussels.

What we do need to understand is there a precedent that has been set and of course, that any future negotiations that are entered into, what is the starting point for our negotiators and our government of the time?” he said.

“When we talk about having access to a number of markets around the world, that starts with having a free, free-flowing trade.”

And that remains the central issue for New Zealand.

It has a free trade agreement with China; it does not have one with the US, and it now has only a limited one with Europe.

Ardern will not be the last New Zealand Prime Minister who cannot answer Australian questions about how to manage the US-China relationship.

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