Ministers off to Oz: time for strategic thinking
Colin James's column for the Otago Daily Times for 24 January 2012
The big topic for Julia Gillard and John Key and their cohorts of senior ministers meeting in Melbourne this weekend is not the bilateral projects and tactics. It is where two small countries on Asia's edge fit in a rapidly and deeply changing world.
The easy topic will be the single economic market (SEM) process and related policies. But within even that comfortable project is a lesson and behind it a strategic question.
The lesson is that SEM action requires ministerial and in some cases prime ministerial dictates, which in part depends on good personal relations through changes of government and cabinet reshuffles. Emails aren't enough -- a point Murray McCully has yet to learn in the wider foreign policy context in his drive to sack large numbers of ministry staff.
In the trans-Tasman relationship New Zealand ministers have to work harder for chumminess, because the smaller partner has relatively more to gain or lose. Moreover, while Australia is New Zealand's most important partner, New Zealand is not Australia's: "The United States is Australia's closest ally and partner," as Gillard said last September.
It didn't build goodwill -- in fact, Canberra was most unamused -- when in 2007 National joined the push by the protectionist Greens to successfully block legislation to set up a joint trans-Tasman therapeutics agency even after Annette King and Tony Abbott had agreed a change which would have met the fears of some small operators on to which Tony Ryall latched. Key and Ryall belatedly resurrected it only last year. It is on this weekend's agenda.
One aspect of the agency, that the two countries have equal voices on the governing council despite the disparity in size and technical contribution, is an important pointer to how future joint agencies could be structured if SEM deepens.
This in turn highlights the strategic dimension looming over SEM: is it ambitious enough or has it come time for a step-change comparable with the leap to CER, the closer economic relationship deal, 30 years ago?
This question was canvassed in background work for the yet-to-be-published "New Zealand Inc" paper on Australia. But if the only NZ Inc paper issued so far, that on India, is a guide, don't look for such strategic pointers.
The strategic issue is not the bilateral linkage as such. It is where the two countries -- but particularly, tiny and alone New Zealand -- fit in the profoundly changing global (dis)order.
One strategic option is to go more Australasian: closer integration. That would recognise growing Australian frustration with SEM's limitations. It would acknowledge there are risks of isolation in a stand-alone foreign policy.
The counter-risk would be to be adjoined to Australia's different and incompatible priorities. Gillard again: "The [Anzus] alliance is fundamental to Australia's security and a cornerstone of stability in the Asia-Pacific." United States troops are to be based at Darwin.
Though New Zealand under Key and McCully has edged closer to the United States, they do not talk in Gillard-like terms and would likely lose office if they did.
And in fact Australia is reassessing its positioning in the light of what Foreign Minister Kevin Rudd called the "rise and rise of China" in a speech in New York on 13 January. Rudd scanned China's history, recent pronouncements, interests (for now) in global order, alternative future trajectories and the many possibilities for friction over territorial, resources, economic and security interests with the United States (determined to remain an Asia-Pacific power), India, south-east Asia and the other BRIC countries.
Australia's tight United States military link is an awkward fit with the fact that China is its No 1 export market. China sees the Darwin base as provocative. (What do we say if asked to join military exercises?)
Rudd skirted that conundrum by focusing on "the rest of us in Asia" (include New Zealand), who, Rudd argues, do not want "some Sino-American duopoly" in Asia and "do not simply see ourselves as collateral damage if it all goes wrong".
Key's ministers cabinet contingent might usefully quiz Rudd this weekend, then seek parallel deep thinking here from officials, academics and experts, including from abroad, on possible and likely but ultimately unknowable global trajectories and options for strategic (and necessarily nimble) responses. There is some evidence some such thinking has been done but of what quality and depth is unclear. Also unclear is how much, if any, of that will be in the NZ Inc China paper Key is issuing on February 3.
The alternative to a strategy, as expat economist David Skilling, now in Singapore, wrote on Friday about global economic change and challenge, is "fatalism" -- just taking what comes. Skilling cites a number of small countries (not including New Zealand) which adopted "deliberate competitive" strategies and have held their own over the past 20 years.
Deliberate. Strategic. Does that sound like us?