Prime Minister Christopher Luxon last Friday appeared to be starting to moderate his pivot to the United States under the foreign policy reset.
Back in August he had told Australia’s Lowy Institute last August that New Zealand’s independent foreign policy was a “nonsense”.
But in his latest foreign policy speech, this time in Auckland to the United States Business Summit on Friday, he adopted a much more cautious approach, backing off any substantial criticisms of China and offering equivocal answers as to whether New Zealand would join AUKUS.
That, however, wasn’t enough for one of his predecessors as National Party leader, Simon Bridges.
He questioned the way the Government had sold AUKUS and asked why New Zealand couldn’t maintain a more independent foreign policy like Singapore rather than follow Australia.
In his speech to the Summit, Luxon expressed concerns about the potential for conflict on the Korean Peninsula but there was less of the talk of the risk of conflict in the Asia Pacific region which had been a significant feature of his key foreign policy speech to Australia’s Lowy Institute back in August.
He did say the United States was an “indispensable economic partner” and “our most important defence and security partner”.
However, his usual critique of China also seemed to have been toned down.
There was no mention of the Taiwan Strait, just the usual complaints (which previous Governments have also ventilated) about China’s actions in the South China Sea and an unspecified objection to China’s adherence to human rights.
It was a speech that John Key, Bill English, Jacinda Ardern or Chris Hipkins could have made.
And those Prime Ministers would have had little difficulty agreeing to the three priorities Luxon said he wanted to bring to the New Zealand – US relationship: growing both countries’ prosperity; strengthening our security; and deepening our relationship.
The missing link in all this is what New Zealand will do about joining Pillar Two of the AUKUS submarine project.
China has made it very clear that it would regard this as a major setback in our relationship.
China has not said that it could impact the trading relationship but it would hardly improve it and if at the same time the US was carrying out Trump’s threat to impose a 10 per cent tariff on imports, New Zealand could be left with its two most important trading relationships in trouble.
Zack Cooper, a Senior Fellow at the conservative American Enterprise Institute, who worked on foreign and defence policy for the Bush administration and is a widely acknowledged expert on China, told the Summit that while Trump was likely to be firm on tariffs, he might be more flexible on security policy, particularly with China.
He said that previously, Trump had been relaxed about China’s policy on Hong Kong and its human rights record.
“The challenge you’re going to have on China policy is a Donald Trump who is remarkably hawkish on trade and very supportive of tariffs but yet could well make a deal with Xi Jinping to increase Chinese economic trade with the United States; change some of China’s economic behaviour in exchange for some arrangement over Taiwan,” he said.
“I’m not saying that’s likely. But I am saying it’s possible.”
Cooper was an early supporter of AUKUS and thought he doesn’t see Trump abandoning it altogether believes there could be some changes to the proposal as it stands now.
“I don’t think we know what Donald Trump is going to think about this deal,” he said.
“I think AUKUS itself is going to have to be re-explained to Trump; maybe rebranded a little bit.
“But I think if you step back, the logic of AUKUS and what it is trying to do should be sustainable, especially the Pillar Two path by which I mean the United States and all of our friends around the world have one huge challenge, which is that when we build defense, anything in defense platform systems, they’re expensive.
“And there are a lot of us building small numbers of platforms.
“And the only way for us to compete with China, with Russia on the defense side, is to work much more closely together to develop the same systems, do it together, to buy the same systems, to do it together, to maintain the systems together.
“And that’s the logic behind AUKUS.”
That proposition that AUKUS Pillar Two is about cost-sharing seemed to be behind Luxon’s response when he was asked about defence expenditure.
“There’s no doubt about it,” he said.
“We are in really challenging economic times.
“We know we want to spend more on defence, and we need to do that.”
He said he was going to hold the new Defence Chiefs and the new Secretary of Defence for a defence capability strategy that was not random.
“Let’s actually stop and take a step back and go back to grass roots and say, what is it that New Zealand actually can do really well,” he said.
“What do we have to face up to what is inside our reach; what we can and can’t do when you’re a small country with real challenges around budgets.”
Since the coalition was formed, Luxon has been more cautious about AUKUS than Foreign Minister Winston Peters.
That caution was evident again in Auckland on Friday.
“With respect to AUKUS Pillar Two, there really hasn’t been a lot of progress since the Labor Government,” he said.
“Our positions are the same.
“We are in the exploration phase.
“There is not a commitment to be honest, it’s going quite slowly with officials still at that level.”
That provoked a critical response from one of Luxon’s predecessors as National Party leader, Simon Bridges.
Now CEO of the Auckland Chamber of Commerce, Bridges was one of the co-sponsors of the Summit.
“Maybe I’m over-interpreting it, but I thought Christopher Luxon was dialling it back where he and others of his Ministers have been on AUKUS in his comments,” he told the Summit.
“It seemed to me he was more cautious in the way that he put it.
“I think the Government does have a bit of an issue and that it does depend on what day and what minister you talk to, what the position on AUKUS is.
“That’s not good enough.
“I do think the Government has not done a particularly good job, in fact, I think they’ve done a poor job on the rationale for AUKUS Pillar Two.
“If they want New Zealand to go along with it, they have to do a heck of a lot better than they have.
“And actually, the serious concerns of serious people like Helen Clark and Don Brash do need to be addressed and they have not done that.”
Bridges may reflect a wider view from Auckland business that was also evident in the meeting he convened between business leaders from the city and Chinese Premier, Li Qiang, back in June when the Premier visited New Zealand.
It was clear from that meeting that the business leaders were not interested in a confrontation with China.
Bridges echoed that view on Friday.
“The business community of New Zealand though not to a person, not to a business, does look at the shifting sands and asks why can’t we be a little bit more like Singapore and a little bit less like Australia and AUKUS is directly part of that,” he said.
Bridges was not the only speaker to question AUKUS.
Labour’s Foreign Affairs spokesperson, David Parker, indicated that Labour was changing its position from one of seeking more information to now, opposition.
He said there was rising opposition in Australia and had been described by Paul Keating, “one of their best Prime Ministers ever”, as the worst deal in history.
This drew a sharp response from April Palmerlee, a former US Assistant Secretary of tate and now CEO of the American Chamber of Commerce in Australia.
And her response underlined the difference between Washington and Wellington and between Canberra and Wellington.
The one thing that Democrats and Republicans agree on is the threat posed by China,” she said.
“In Australia right now, the one thing I hear people agreeing on is AUKUS.
“Paul Keating is a real outlier.
“Labor and the Coalition have expressed strong support for AUKUS.”
But though there may be agreement at present in Washington that China is a threat, the Trump administration may not look at things in such a simplistic way.
As Cooper suggested, Trump could divide that threat into two parts, a security part and an economic one, and then try to trade one off against the other.
For a president who wrote a best-selling book called “The Art of the Deal,” that would seem like a realistic possibility and one that should warn us to keep all our options open.
