Astride the eagle & dragon: John Key's Pacific paradox

As John Key re-writes the script for relations between New Zealand and the US, what are the implications for China and does this mean a return to automatic support for America?

There has been a fair bit of recent speculation about whether John Key's approach to foreign policy represents a departute from the consensus of the past two decades and if this, somewhat to everyone's surprise, will be a central part of his legacy. After all, Key is supposed to be all about the economy, in contrast to Helen Clark's focus on foreign relations.

But when you get Ray Miller musing on this topic on Q+A, and Fran O’Sullivan and Bryce Edwards speculating on the issue in the Herald (and in Fran's case on The Nation), something is afoot. Of course it was on the back of his visit with President Obama and the obviously warm atmospherics surrounding the visit, but the issue bears closer examination. And at this point I should declare an interest, in that the Centre of Strategic & International Studies in Washington DC has just published my paper, The New Zealand Paradox, which is all about New Zealand adjusting to the change in the balance of power in the Asia Pacific over the next 20 years.

So has John Key tilted New Zealand somewhat more toward the United States, and if so what are the implications of this?

There is no doubt New Zealand has a much closer relationship with the United States than it had six years ago. This was a specific goal of National when it came into office in 2008, and it had been well signalled in the manifesto documents put out prior to the 2008 election. The strategy was to avoid focusing on the things that divided the two nations, and to deal only with the things that would enable a more co-operative approach.

What was not anticipated is just how well that John Key was able to build a personal relationship with President Obama and therefore gain a level of access and trust that is unparalleled for a New Zealand Prime Minister in the last 50 or more years. The fact that the Prime Minister was delegated to lead on the TPP talks at APEC in 2013 is indicative of the role that New Zealand is now able to play.

But what does it really mean anyway?

While we might be appreciative that New Zealand navy vessels can now tie up at Pearl Harbor, so can ships of the PLA Navy. China is a first time participant at RIMPAC 2014, so this has truly become the one navy exercise that literally includes every Asia Pacific nation. But there is much more to New Zealand's relationship with the United States than these kinds of atmospherics.

New Zealand now has almost as much access to United States policymakers as Australia, and as a result has become almost as mindful of United States' positions on international issues as Australia is. This does not mean automatic support for the United States, but there is no longer a reflexive stance that New Zealand should be suspicious of its motives.

Of course many will argue that such a repositioning carries with it substantial risk, especially in respect of the relationship with China that New Zealand has spent so much energy in cultivating. The payoff for preferential access to the Chinese market is that we are now crucially dependent on the Chinese consumer for our economic success. But it has propelled our growth rate virtually to the top of the OECD.

So can New Zealand successfully balance the relationships we have with the two great powers of the Asia Pacific?

For the time being New Zealand is displaying a certain adroitness in doing so. Just as John Key has removed antagonisms from the relationship with the United States, so has he done with China. Not for him the entertaining of the Dali Lama, or intruding into the issues of the South China Sea.

Much of this is inherently easier for a National Prime Minister as a result of the pragmatism that is part of the National Party’s DNA. There is much less pressure from the party for symbolic gestures.  

Helen Clark is undoubtedly among the foremost of our Prime Ministers in her contribution to New Zealand’s position in the world. Her great skill in this area was derived from decades of intensive intellectual effort. John Key comes from a different domain. The experience he gained as an international banker operating at the highest levels has given him an insight into international relations that is barely discerned by traditional practitioners of international policy. But this experience bears directly on his understanding that a small country needs a web of productive relationships if it is to prosper.

Both Prime Ministers have built New Zealand’s advantage by understanding the need for balance. The next twenty years is likely to be exceptionally challenging, as the balance of power changes in the Asia Pacific. It will require the highest order of diplomacy from New Zealand’s future Prime Ministers to remain astride the dragon and the eagle.