Adjusting to a changing world: Terence O'Brien discusses New Zealand's foreign policy and international governance.

• Author: O'Brien, Terence

Irrespective of size, a country's foreign policy is driven primarily by its endowments and by its needs, by its history, culture and national self-view. It is driven as well, of course, by changing international circumstances and in this modern world by the impacts of so-called globalisation where an epoch-making revolution in communications technology has collapsed time and distance--even for the most remote of countries. This has intensified the ease and speed with which people, ideas, transactions, financial mismanagement, crime, and trade in weapons cross borders. In international relations all this has materially increased both the opportunities and the risks.

New Zealand's absence of critical mass--its lack of strategic raw materials and its distant geography--nourished throughout the 20th century anxiety amongst politicians, advisers and sections of the wider community over our marginalisation from the affairs of the world. Two world wars deepened a New Zealand psychology of strategic dependency upon powerful nations, even while New Zealand itself by and large retained a low sense of actual physical threat, given the protections of remote geography. That psychology resulted, nonetheless, in New Zealand involvements with conflicts, disputes and foreign policy reversals of powerful nations in places remote from these shores. That trend endures to this day.

In today's globalising world marginalisation is, however, less a consequence of neglect by the powerful or the tyranny of geography. It flows rather from actual policy decisions of governments (for example Cuba, North Korea). Choice not fate marginalises countries today. The multilateral institutions that exist to support international governance in the modern world serve, moreover, to dispel marginalisation for governments that are serious-minded in international affairs. These institutions add extra dimensions to foreign policy, especially for smaller countries, while at the same time they underscore the intrinsic inter-dependence in modern international life between countries and between issues. All that serves to explain the New Zealand interest in effective multilateral institutions for international governance.

New Zealand's intangible presence on the international stage means, for the most part, that it operates below the radar screens of the powerful. Apart from the South Pacific its foreign policy is essentially reactive to external trends. Providing New Zealand cultivates nimble discernment--in both the private and public sectors--strategic invisibility is no obstacle to productive foreign policy. Indeed it can be both positive and expedient. The status of friend but not the military ally of powerful nations sits comfortably with strategic invisibility. Likewise, non-nuclear policy is both logical and respectable for a country in New Zealand's situation, in a world consumed by the dangers of the spread of nuclear weapons. Recognition of this last fact, albeit somewhat belatedly by some others, earned the New Zealand prime minister an invitation to the Nuclear Security Summit in Washington in April.

Economic interests

New Zealand's immediate external interests are shaped, as with many countries, by the nature of its economy. External trade occupies an important proportion of New Zealand gross national product and we are reliant upon foreign investment and technology. New Zealand traders operate in over 100 markets in the world, which is some testament to the ingenuity and enterprise of a small remote economy. Predictability of trade flows and a rules-based international trading system are critical to our wellbeing, in particular to our ability to leverage the country's comparative advantage as a farm economy that transforms grassland, efficiently and competitively, into high value protein in a food hungry world.

Yet foreign relations are full of irony. New Zealand's capacity to earn its way in the world as an efficient reliable food producer faces its stiffest challenge from those selfsame powerful nations upon whom New Zealand traditionally cultivated strategic dependency, and which have consistently pursued protectionist agricultural policies that endanger New Zealand terms of trade. That baleful lesson of modern international trade policy has driven diversification of New Zealand production, markets and foreign policy. As trade and the flag marched off more or less in unison in search of new pastures, New Zealand foreign policy both extended its reach and deepened in complexity as it encountered dealings with governments beyond its original international relations comfort zone. Diplomacy was the vital ingredient for widening the opportunities for trade policy in a world where government intervention, particularly in the primary sector, was the rule.

The prolonged effort to safeguard market access to a unifying and protectionist Europe and the ground breaking conclusion of a free trade agreement with China as well as other Asian governments are signature examples over the past four decades of New Zealand foreign policy tenacity proving indispensable for preserving and opening opportunities. The diversification effort has undoubtedly been propelled by the striking economic transformation over the last 30 years, particularly in East Asia, where demand and the capacity to pay remunerative prices for New Zealand product altered the balance of New Zealand interest quite markedly. Asian governments make it quite plain, however, that foreign policy commitment and indeed convergence are essential preconditions for rewarding trade/economic and other partnerships.

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Multilateral governance

The tenuous nature of New Zealand's place in the international scheme of things--its lack of hard power and of economic muscle--explains the basic attraction for this country of rules-based international relations. In the mid-20th century, the United Nations and related institutions (IMF, World Bank and WTO/GATT) were conceived as a universal system to manage peace and prosperity in the world in the wake of global conflicts of massive savagery. For the first time in history independent states committed collectively to prevent conflict and to alleviate the causes of conflict--poverty, injustice, aggression--and to manage international relations, including trade and economic relations, on the basis of sovereign equality and fairness. The values, ideals and interests of the new system reflected the values, ideals and interests of the founder nations, which comprised the victorious governments in the global wars of the 20th century. New Zealand was one of the smallest among such company. That gives us a genuine stake in the effectiveness of the international institutions...