Amongst the news of crashes and weather, one story of immense significance to New Zealand has been widely ignored... The US has reviewed its defence priorities and is moving back into our neighbourhood big-time. This offers huge risks and opportunities

At the start of President Obama's first term there was talk of him being the first "Pacific President" – being born in Hawaii and schooled in Indonesia gave him a rare westward view of the world, a perspective that's different from the focus on Europe and the Middle-East, which dominates on America's east coast. Then Obama was awarded that Nobel Peace Prize and there was hope be may be a more pacific president as well.

Both of these notions seemed to have been over-hyped as the years passed by, with America's wars in Iraq and Afghanistan dragging on longer than hoped, the failure to close the prison at Guantanamo, the heavy use of drones in the Middle East – peace and the Pacific hardly seemed urgent priorities.

But this (southern) summer, that's changing. The Iraq War is over, the Pentagon and US defence forces are facing budget cuts in the hundreds of billions of dollars and of huge significance to New Zealand, Obama has announced the results of his comprehensive defence review.

What does it conclude? In short, the US is in transition from a decade of war in the Middle East. As that chapter ends its new focus is the Asia-Pacific region. The review says:

"US economic and security interests are inextricably linked to developments in the arc extending from the Western Pacific and East Asia into the Indian Ocean region and South Asia, creating a mix of evolving challenges and opportunities. Accordingly, while the US military will continue to contribute to security globally, we will of necessity rebalance toward the Asia-Pacific region. Our relationships with Asian allies and key partners are critical to the future stability and growth of the region. We will emphasize our existing alliances, which provide a vital foundation for Asia-Pacific security."

Richard Haass, President of the Council for Foreign Relations (one of the world's most respected foreign affairs think-tanks and our partners in Pundit's World News Brief), writes:

"The United States has become preoccupied with the Middle East... and has not paid adequate attention to East Asia and the Pacific, where much of the twenty-first century's history will be written.

The good news is that this focus is shifting. Indeed, a quiet transformation is taking place in American foreign policy, one that is as significant as it is overdue. The US has rediscovered Asia."

Of course we've seen the US preparing the ground for some time, most significantly for New Zealand in the form of the Wellington Declaration at the end of 2010. But this announcement last week locks it in. A Pacific focus is now official US strategy.

Obama even pointed out that the Asia-Pacific region is the one area where the Pentagon budget cuts won't bite, saying:

"... we will be strengthening our presence in the Asia Pacific, and budget reductions will not come at the expense of that critical region".

The main reason for America's "reorientation" is China. On that subject, the defence review says:

"Over the long term, China’s emergence as a regional power will have the
potential to affect the US economy and our security in a variety of ways. Our two
countries have a strong stake in peace and stability in East Asia and an interest in building a cooperative bilateral relationship. However, the growth of China’s military power must be accompanied by greater clarity of its strategic intentions in order to avoid causing friction in the region"

While the diplomatic stressing of peace and stability will be welcomed by countries such as ours, that "however" indicates this transition is not without threat and tension.

China and America remain in competition, not just for regional power, but for resources and, ultimately, money.

As Haass notes:

"With its large populations and fast-growing economies, it is difficult to exaggerate the region's economic importance. American companies export more than $300 billion in goods and services to countries in the region each year... Regardless of whether the twenty-first century will be another "American century," it is certain that it will be an Asian and Pacific century."

All this should send a shiver down the spines of New Zealand leaders – the opportunities and dangers are sizeable.

This places New Zealand slap bang in the middle of things – not geographically perhaps, but geopolitically. That tyrant distance is no longer in charge in New Zealand and our thinking should no longer be determined by our sense  of isolation, but by one of engagement. The world's two great powers will spend this century jostling for position in our back-yard.

Given that China and the US are our second and third largest trading partners, our standard of living is at stake in this new game. But those close ties suggest a unique role for New Zealand and one we should be positioning ourselves for already.

Even more than Peter Fraser suggested at the end of World War II, we can play the 'honest broker' role in our region, one that ensures a close friendship with, but ultimate independence from, both major powers.

This is not a time to choose sides.

We should be the voice for democracy, the rule of law, mediation and human rights in this region that encourages the rise of new powers, but respects the role of the old actors as well. That at times may mean speaking for Asia rather than our traditional allies and some difficult conversations – and I'm not sure if this government is on that path – but if we are wise, that's where our future lies.

Out of that can come the trade we desire, but it will be important to realise that greater trade is an outcome of these nobler goals, not a goal in itself. Trade alone does not guarantee peace and prosperity.

Just look at the Opium Wars of the 1800s to see that trade between China and the West does not guarantee peace, but rather if mishandled can become a cause of conflict. I've read Amitar Ghoshs's River of Smoke this summer, and it's a telling reminder. British sales of opium became vital to Britain because of the immense profits gain and because they addressed a terrible trade imbalance between the two powers, which had seen vast demand for Chinese goods in the West but few sales the other way.

Sound familiar? It's frightening to look at how unbalanced US and Chinese trade has become in the past 20 years and what little impact the recession has had on it. While the US is unlikely to go to war as Britain did, this is just one area of potential tension between the two powers; a tension that now inevitably involves us.

There are other risks. Since World War II, the US has focused on Europe and then the Middle East. Hostilities and an expanded military presence grew out of that focus, so we should be wary of having the US move into our neighbourhood.

Already the US has identified South Asia alongside the Middle East as a "primary loci" of terrorist threats. (Why not north Africa?). Already it has convinced Australia to open a military base for 2500 marines (for now). Already countries are choosing sides.

That's scary, but it also provides us with opportunities. If we want to be a friend to both countries we will have to be careful how we play this hand, but the diplomatic fact will be that both countries will need us more than in the past, and that strengthens our hand in bi-lateral relationships.

That's especially true of the US. No, that doesn't mean a free trade deal – we really have to get over that obsession, because even if the Trans-Pacific Partnership doesn't pull itself apart, it'll be a long time before we're likely to see a Congress willing to touch such a deal. Our focus should be more incremental gains.

I'm not expert enough to suggest what – but we should be looking at what we need to improve our prospects and what the US has to offer, such as investment capital, business expertise on a grand scale and education. Whatever we may think important, we're now in a better position to find partners in or via the US government.

Our clear message to it should be that their interests in the region are not best served by an increased military presence, but by an increased economic presence – the region is happy for it to engage more in the region and to buffer China somewhat. But its tools should not be primarily planes and ships, but investment, innovation, education, aid and skills.

Much the same can be said for China. For a "western" nation, we have a unique relationship with that country. Just because we already have an FTA doesn't mean we shouldn't be identifying how else we can benefit from that special friendship. Even better, we should be looking to deepen it, thus building trust and making future tensions easier to manage.

China's reaction to Obama's 'Pacific pivot' has been to again stress that its growth is a threat to no-one (so long as no-one stands in the way of that growth – let's not forget that China remains a very poor country). It's goal is to be a good friend to the Pacific and share its growth around the region. At the same time, as this editorial from the Chinese news agency warns, the new US policy "has further complicated China's neighbourhood".

When talk of complications arise, New Zealand needs to be the voice of simple, common partnership.

The robust growth of Asian economies is the key to unlocking our own economic prospects, but that depends on the growth of democracy, law and human rights in the region. The promotion of those values are also the key to peace here in New Zealand and in our neighbourhood.

So as the new year kicks off, we should recognise the new environment Obama's announcement has created. New Zealand's job will be to help mediate America's new focus on our patch and to stress the importance of the region's common interests. Our top priority must be helping to manage relationships from a position of independent friendship so that the Pacific remains an ocean of peace.

Comments (16)

by Flat Eric on January 09, 2012
Flat Eric

So much for the Dear leader's 'benign strategic environment' then...where's an airforce when you need one?

by David Beatson on January 10, 2012
David Beatson

In the last 24 hours, China’s Ministry of Defence has issued its response to the new American defence strategy - a statement warning the United States “to be careful in its words and actions”. According to Reuters, it says “the accusations leveled at China by the U.S. side in this document are totally baseless. …We hope that the United States will flow with the tide of the era, and deal with China and the Chinese military in an objective and rational way, will be careful in its words and actions, and do more that is beneficial to the development of relations between the two countries and their militaries." A Chinese reference to the defence strategy can be found at

Reuters and other media references say the statement is posted on the Ministry’s website but I have been unable to locate it there.


by Tim Watkin on January 10, 2012
Tim Watkin

Wow, X I'm honoured that you've bothered to create a whole new post to respond to this, but having read the post I'm not sure what you're saying. We need to be Hong Kong not Captain Stubbing? ?Huh?

Sure, we need to wangle benefits from this new strategic advantage. If you read my post again you'll see I said as such. The question is how. I'm saying we gain most advantage by being the honest broker/bridge.

I'm not sure what you're advocating by contrast. To side with China or the US? To try and play them off against each other? Pacific Islands have tried to do that with China v Taiwan and China v Japan –  it gets them a few million extra in aid but makes them look like fools, pisses off the other countries and undermines trust. And anyway, these aren't children we're dealing with here, but the world's greatest powers.

My point is that developing independent trust is the best way to leverage most from both in terms of trade and economic gain AND it maintains our strategic position AND is the decent/moral thing to do.

Hong Kong? Well, NZ's not in the middle of a core trading route and not an empty island and we're not wanting to be taken over by the West... so I don't think the comparison takes us very far. Sure, we want to use this development to our benefit – but let's not leap in all graspy and greedy. We're a better country than that, and being that better country – as with most things in life – will serve us better in the long-run. 

by Tim Watkin on January 10, 2012
Tim Watkin

BTW X, you were all about the profits/coin, but didn't address the risks at all. As I mentioned, getting more attention from the US can create as much tension as prosperity, so let's go warily.

But I absolutely agree with your point that the tyranny of distance has defined us for such a long time... and we may be on the path to changing that. Or being changed. Over the next century it seems we will be much closer to the centre of things, for good or ill.

by Tim Watkin on January 10, 2012
Tim Watkin

SPM, are you saying that our Skyhawks would have made one jot of difference to any escalating tensions in the Pacific? A) We've always been dependent on allies and/or our relationships with other countries (ie friendships which mean no-one wants to attack us) and B) It's going to be about ships, not planes, when it comes to practically protecting our interests.

by Flat Eric on January 10, 2012
Flat Eric

We could have upgraded the A4s long ago.  Ships are important no doubt in protecting a maritime zone and projecting force but as long ago as December 10 1941 we learnt that unprotected ships are vulnerable to air attack; see also the Falklands war for a recent example. 

As for friendship and no one wanting to attack us, that didn't work out so well for many countries over the last century or so.  When maritime and even agricultural resources become more crucial, we may not have friends around.

by Tim Watkin on January 10, 2012
Tim Watkin

SPM, you're still arguing on the premise that a country our size could use air defences to see off a major power and I think that's fundamentally flawed. No kind of air force we could afford could make any difference in either a regional stoush or our own defence... And even if a resource hungry enemy ignores history and their own strategy and heads our way (China? India? the US?), they'll have to come over the Pacific, through Australia plus all the alliances and pacts we have built up in this region.

Accept our size, geography and history and you accept that our best defence is in building relationships.

by XChequer on January 10, 2012

Hey Tim, 

Your post fitted neatly, timewise, into a discussion with an Economics lecturer here in Lincoln about our growing trade with China and the possiblilty (I reckon probablity) of the Yuan becoming the major world wide currency and not the US dollar which inevitable leads to questions on strategic influence in the Asia/Pacific region.

I guess my point (lost in my normal spew of vomitous, verbal garbage and alliteration) was that our focus shouldn't be on becoming a power for peace in the region first then reaping the rewards after because I don't think that one automatically follows the other. Given New Zealander's "aw shucks" humility and a propensity for humbleness that is world renowned and thus the reason we are asked often to "sit at the table" with the big guns, I would be concerned that we could miss the boat (can't resist another "nautical" allusion) on the opportunities that will be forthcoming from this rebalancing of strategic interests.

My point is: Lets get a bit selfish about this. We have some awesome skills in diplomacy and common sense that are well regarded by many. Added to this pot is the worlds continued search for the two things that the growing Asia/Pac region needs and that we have - water and protein. 

SPM hints at a possible likelyhood of invasion for, I suspect, the reasons outlined above. Unfortunately, whether we'd taken up the offer to up grade the Skyhawks, would make little difference to our overall security as there is that tiny nugget of a problem literally standing in their way called "Australia". Given the Aussie's penchant for throwing in with Uncle Sam, as evidenced by the recent decision to base Marines on Australian soil and their furthering ties to the US military industry (The F-35 program, C-17's et al), China, in all probability, would love to have a great friendship with a country that lurks in Australia's back pocket. 

These powerplays so early in the piece serve to enhance our chances to turn political capital into hard currency - something the world seems morbidly short of at the moment.

by XChequer on January 10, 2012


Our role with the Skyhawks at the height of ANZUS was on maritime strike, ASW and recon of the shipping lanes in conjunction with the tactical strike power of the Aussies and the added strategic use of a US Carrier airgroup. A move to the F-16 would have been a grave tactical mistake, IMHO, as the maritime strike effectiveness of the proposed "upgrade" would have been average at best. 

by Max Ritchie on January 11, 2012
Max Ritchie

Re "Skyhawks", changing NZ's defence policy and structure by abandoning the combat air capability was more of a symbol, an indication of Labour's change in strategy and alignment. It sent a clear message to the US and Australia that things had changed. The Lange snoot-cocking sent one message, this reinforced that. NZ governments ever since have been trying to signal that they still want to be inside the tent. There was never any question that we could go it alone. The F18s were a similar signal, in a different direction of course.

by DeepRed on January 12, 2012

If anything, there's no reason why NZ can't be the Canada of the South Pacific, diplomacy wise. A previous Tim Watkin post comes to mind.

If worst came to worst, a consignment of short-range ballstic missiles would do the same task as a jet strike fleet for a fraction of the cost. But there's one small problem - there's no adrenalin rush from sitting inside a missile silo control room.

by Tim Watkin on January 12, 2012
Tim Watkin

Max, you're right this was and is about symbols. And Lange's, it seems, was muddled into somewhat. But the US took a dislike to that message and we suffered in Washington for some time. You can make your own mind up as to whether that mattered or not.

Now, we want in, as you say. And I've no problem with maintaining a mature, open-minded friendship with the US. But I'm suggesting we're better not to pick tents. For a start, China owns most of the US tent as it is!

by william blake on January 13, 2012
william blake

Thanks Tim, engagement over isolation is one of the best paragraphs I have read.

However I do have a problem with who we engage as.

We are willingly lashed into a trade agreement with China that sees everybody having cheaply available necessities such as clothing and footwear but this is at the expense of basic manufacturing and jobs. We are also flooded with film, television, books, economic lectures, carbonated sugar water and franchise 'food' from America.

Who owns the banks, farms and increasingly the basic infrastructure of this country, the water and the electricity.

Why should the landlords listen to the tennants?

by Tim Watkin on January 13, 2012
Tim Watkin

William, you're opening a pandora's box of globalisation there... You can make the same argument for many countries. The US is worried about being dependent on "foreign oil", China and Japan owns most of its debt, a small number of US investors own bunches of companies that supply goods around the world, Australia is dependent on Chinese importing its minerals, China frets about not having the resources it needs... Point is, we're all inter-dependent and I don't think we're merely tenants here. Not yet, anyway. And I'm not sure trying to ensure everything is owned by NZ would do wonders for our prosperity and place in the world, individual's careers, and the like.

But your core point that ownership matters makes sense to me. And we do have to be careful of that as these giants start nosing around even more than before.

by Bruce Gibbins on January 15, 2012
Bruce Gibbins


The part our country plays in the changing events in our region currently being orchestrated by the increasing face off between the US and China will not really be determined by common sense or logic but instead will be influenced by the sycophantic approach to these changes proffered by a New Zealand government of almost any persuasion that feels its natural stance is to be flagellated by powers it is frightened of offending.

The Mouse That Roared may well be the observation back from the future, but our attempts at a new Zealand style of foreign affairs where we at last attempt to determine our own place in the world in our own interests rather than to be historically supporting the imperatives of Great Britain and the United States with a nudge in the ribs from Australia will only be allowed if foreign powers see the changes in our counties interests happen to coincide with their own which they sometimes don’t or at least haven’t.

by Ian Dalziel on January 19, 2012
Ian Dalziel

Interesting to note in today's Press (and as reported on Radio NZ - ) that Jonathan Coleman and the NZ Defence Force has decided to spend $83 million dollars for twenty years access to a US Military satellite network, ostensibly to "ensure better communications for military personnel deployed overseas." - currently we have 343 active military personnel overseas ( ) hardly worth an extra $4 million a year for two decades - and surely our already expensive GSCB funding for the Waihopai satellite communication interception base, etc should have given us this access... who really benefits from this?  Is this perhaps a string attached to the TPPA "free trade" agreement with the US, what next US bases here?

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