For many years New Zealand elites have claimed to have an “independent” foreign policy, so much so that it has become a truism of NZ politics that transcends the partisan divide in parliament and is a shibboleth of the NZ foreign policy establishment that is parroted by media and pundits alike. But is it a correct characterization? More broadly, is any country able to maintain a truly independent foreign policy?
If “independence” in foreign policy is defined as the unfettered freedom and ability to pursue courses of action in the international arena without regard to cost or consequence, then the answer is no. Foreign policy independence is an aspirational goal (for some) rather than a practicable achievement (for very few).
Instead, what NZ has is a flexible foreign policy based on what can be called constrained or bounded autonomy. Just like the notion of bounded rationality in game theory (where rationality is not opened-ended but framed by the interactive context in which decisions are made), NZ’s foreign policy autonomy occurs within identifiable parameters or frameworks governing specific international subjects and relationships that are not fungible or identical in all instances. Some are broad and some are limited in scope. Some are more restrictive and some are looser in application. Some are more issue-specific or detailed than others depending on the frameworks governing them. Within those parameters NZ has a significant range of foreign policy-making choice and hence room to maneuver on the world stage.
One reason that NZ does not have an independent foreign policy is that NZ is inserted in a latticework of formal and informal international networks and relationships that to varying degrees constrain its behavior. Things like membership in TPPA, 5 Eyes, WTO, IMF, WHO, NPT, COP, World Bank, INTERPOL and other multinational agencies as well as regional organizations like the Pacific Island Forum, Five Powers Agreement, NATO partnership and various international conservation and legal regimes, as well as bilateral agreements such as the NZ-PRC FTA, Washington and Wellington Agreements and Australia-NZ close defense relations, clearly demonstrate that NZ has formal and informal commitments that bring with them (even if self-binding) responsibilities as well as opportunities and privileges. What they do not bring and in fact mitigate against is foreign policy independence.
This latticework of relationships is the foundation for NZ’s commitment to a rules and norms-based international order because as a small country operating in a world dominated by great and medium powers, it is the commitment and enforcement of international codes of conduct that balances the relationships between big and small States. That gives NZ a measure of institutional certainty in its foreign relations, something that consequently grants it a degree of autonomy when it comes to foreign policy decision-making.
This is what allows NZ, in the broader sense of the term, to be flexible in its foreign policy. Within its broadly autonomous and flexible position within an international system governed by an overlapping network of rules, regulations and laws, comes the “nested” (as in “nested “ games as per rational choice theory, where the broadest macro-game encompasses a series of “nested” meso- and micro-games) ability to move between approaches to specific issues in a variety of areas in the diplomatic, economic and security spheres.
A second reason that NZ does not have an independent foreign policy is due to what international relations theorists call the “Second Image” effect: the influence of domestic actors, processes and mores on foreign policy-making. NZ’s foreign policy is heavily dominated by trade concerns, which follow mercantilist, Ricardian notions of comparative and now competitive advantage. The logic of trade permeates NZ economic thinking and has a disproportionate influence on NZ foreign policy making, at times leading to contradictions between its trade relations and its support for liberal democratic values such human rights and democracy. As trade came to dominate NZ foreign policy it had a decided impact at home, with the percentage of GDP derived from import-export trade averaging above 50 percent for over three decades (with a third of the total since 2009 involving to PRC-NZ trade).
Meanwhile, the domestic ripple effect of trade-related services expanded rapidly into related industries (e.g., accounting, legal and retail services related to agricultural export production), adding to its centrality for national economic well-being. As things stand, if NZ was to be cut off from its major trading partners (the PRC and Australia in particular), the economic shock wave would wash over every part of the country with devastating consequences.
What this means in practice is that export sector interests have a disproportionate influence on NZ’s foreign policy-making. The country’s material dependence on trade in turn locks in pro-trade mindsets amongst economic and political elites that either subordinate or inhibit consideration of alternative priorities. That reduces the freedom of action available to foreign policy-makers, which reduces their independence when it comes to formulating and implementing foreign policy in general. Almost everything passes through the filter of trade, and questions about trade are dominated by a narrative propagated by actors with a vested interest in maintaining the trade-dependent status quo.
Althugh less influential than the export-import sector, other domestic actors also place limits on foreign policy independence. Disapora communities, the intelligence and military services, tourism interests, religious groups, civil society organizations—all of these work to influence NZ’s foreign policy perspective and approaches. Balancing these often competing interests is an art form of its own, but the key take-away is that the influence of domestic actors makes it impossible for NZ to have a truly “independent” foreign policy for that reason alone, much less when added to the international conditions and frameworks that NZ is subject to.
Given those restrictions, the key to sustaining foreign policy flexibility lies in being principled when possible, pragmatic when necessary and agile in application. Foreign policy should be consistent and not be contradictory in its implementation and requires being foresighted and proactive as much as possible rather than short-sighted and reactive when it comes to institutional perspective. Crisis management will always be part of the mix, but if potential crises can be foreseen and contingency scenarios gamed out, then when the moment of crisis arrives the foreign policy-making apparatus will better prepared to respond agilely and flexibly.
In short, NZ has and should maintain a flexible foreign policy grounded in support for multilateral norms and institutions that allows for autonomous formulation and agile implementation of discrete positions and approaches to its international relations and foreign affairs. Whether it can do so given the dominance of trade logics in the foreign policy establishment remains to be see.
The big picture.
The issue of foreign policy independence matters because the world is well into the transition from unipolarity (with the US as the hegemon) to multipolarity (which is as of yet undefined but will include the PRC, India and the US in what will eventually be a five to seven power constellation if the likes of Japan, Germany and other States emerge to prominence). Multipolar systems are generally believed to be more stable than unipolar systems because great powers balance each other on specific issues and obtain majority consensus on others, which avoids the diplomatic, economic and military bullying (and response) often associated with unipolar “hegemonic” powers. However, the transition from one international system to another is marked by competition between rising and declining great powers, with the latter prone to starting wars in a final ttempt to save their positions in the international stats quo.
In the period of long transition and systemic realignment uncertainty is the new normal and conflict becomes the default systems regulator because norm erosion and rules violations increase as the old status quo is challenged and the new status quo has yet to be consolidated. This leads to a lack of norm enforcement capacity on the part of international organizations rooted in the old status quo, which in turn invites transgressions based on perceived impunity by those who would seek to upend it. This has been seen in places like the South China Sea, Syria, and most recently Ukraine.
The transitional moment is also marked by confclits over the re-defining of new rules of systemic order. These conflicts may or may not lead to war, but the overall trend is the replacement of the old system (unipolar in the last instance) with something new. Illustrative of this is the Russian invasion of Ukraine, where a former superpower well into terminal decline has resorted to war on a smaller neighbor as a last attempt to hold on to Great Power status. No matter what the outcome of the conflict itself, Russia will be much diminished by its misadventure and therefore will not be a member of the emerging multipolar configuration.
The new multipolar order will include traditional “hard” and “soft” power usage but will also include “smart” and “sharp” power projection (“smart” being hybrids of hard and soft power and “sharp” being a directed focus by State actors on achieving specific objectives in foreign States via directed domestic influence and hybrid warfare campaigns in those States).
They core feature of the emerging multipolar system is balancing. Great Powers will seek to balance each other on specific matters, leading to temporary alliances and tactical shifts depending on the issues involved. They will then seek the support of smaller States, creating alliance constellations around individual or multilateral positions.That is why systemic multipolarity is best served when odd numbers of Great Powers are present in the configuration, as this allows for tie-breaking on specific subjects, to include rules and norms re-establishment or consolidation.
More importantly, in multipolar systems balancing becomes both a focus and a feature of State behaviour (i.e. States seek to balance each other on specific issues but also desire to achieve an overall balanced system of interests in the multipolar world). In a sense, multipolar balancing is the diplomatic equivalent of the invisible hand of the market: all actors may wish to pursue their own interests and influence the system in their favour, but it is the aggregate of their actions that leads to systemic equilibrium and international market clearing.
In a nutshell: although international norms violations are common and conflict becomes the default systems regulator during periods of international transition and systemic realignment, the multipolar constellation that emerges in its wake is chracterised by balancing as both a focus and a feature. That demands flexibility and agility on the part of great powers but also gives diplomatic space and opportunity to smaller powers with such traits.
In this context a flexible and agile foreign policy approach allows a small State such as NZ considerable room for maneuver, may magnify its voice regarding specific areas of concern (such as climate change, environmental security, migration and the general subject of human rights, including indigenous and gender rights) and therefore give it increased influence disproportionate to its size and geopolitical significance (in other words, allow it to genuinely “punch above its weight”).
Issues for New Zealand.
On the emerging international system.
If a flexible and agile foreign policy is pursued, NZ has the ability to expand its diplomatic influence and range of meaningful choice in the emerging system. For self-interested reasons, NZ must push for the early consolidation of a new multipolar order dominated by liberal democracies, recognizing that there will be authoritarian actors in the arrangement but understanding that a rules-based international order requires the dominance of liberal democratic values (however hypocritically applied at times and always balanced by pragmatism) rather than authoritarian conceptualisations of the proper world order. In practice this means extending the concept of “liberalism” to include non-Western notions of cooperation, consensus-building, transparency and proportional equality of participation and outcomes (this is seen in the current NZ government’s inclusion of “Maori Values” in its policy-making orientation). The need for univerally binding international rules and norms is due to the fact that they help remove or diminish power asymetries and imbalances that favor Great Powers and therefore level the playing field when it comes to matters of economic, cultural, diplomatic and security import. For this reason and because it is a small State, NZ has both a practical reason to support a rules-based international order as well as a principled one.
NZ and the PRC-US rivalry.
The key to navigating US-PRC tensions is to understand that NZ must avoid the “Melian” Dilemma:” i.e., being caught in the middle of a Great Power conflict (the phrase comes from the plight of the island-state Melos during the Peloponnesian Wars, where Melos attempted to remain neutral. Sparta agreed to that but Athens did not and invaded Melos, killed its men, enslaved women and children and salted its earth. The moral of the story is that sometimes trying to remain neutral in a bigger conflict is a losing proposition).
NZ will not have a choice as to who to side with should “push come to shove” between the US and PRC (and their allies) in a Great Power conflict. That choice will ultimately be made for NZ by the contending Powers themselves. In fact, in a significant sense the choice has already been made: NZ has publicly stated that it will stand committed to liberal international values, US-led Western security commitments and in opposition to authoritarianism at home and abroad. While made autonomously, the choice has not been made independently. It has been forced by PRC behaviour (including influence, intimidation and espionage campaigns in NZ as well as broader misbehavior such as its record of intellectual property theft, cyber-hacking and the island-building projects in the South China Sea) rather than NZ’s desire to make a point. Forced to preemptively choose, it is a choice that is principled, pragmatic if not necessarily agile in application.
How much to spend on defense?
Focus on overall Defense spending (however measured, most often as percentage of GDP) is misguided. What matters is not how much is spent but how money is spent. Canada, for example, spends less (1.3 percent) of GDP than NZ does (1.6 percent) even though it a NATO member with a full range of combat capabilities on air, land and sea. The 2 percent of GDP figure often mentioned by security commentators is no more than a US demand of NATO members that is most often honoured in the breach. Although it is true that Australians complain that NZ rides on their coattails when it comes to defense capabilities, NZ does not have to follow Australia’s decision to become the US sheriff in the Southern Hemisphere and spend over 2.5 percent/GDP on defense. Nor does it have the strategic mineral resource export tax revenues to do so. Moreover, even if it overlaps in places, NZ’s threat environment is not identical to that of Autsralia. Defense priorities cannot be the same by virtue of that fact, which in turn is reflected in how the NZDF is organized, equipped and funded.
NZ needs to do is re-think the distribution of its defense appropriations. It is a maritime nation with a land-centric defense force and limited air and sea power projection capabilities. It spends the bulk of its money on supporting this Army-dominant configuration even though the Long-Term Issue Brief recently issued by the government shows that the NZ public are more concerned about non-traditional “hybrid” threats such as disinformation, foreign influence operations (both State and non-state, ideologically-driven or not), climate change and natural disasters as well as organized crime, espionage and terrorism. More pointedly, the NZDF has a serious recruitment and retention problem at all staffing levels, so no material upgrades to the force can compensate for the lack of people to operate equipment and weapons.
This is not to say that spending on security should completely shift towards non-traditional, non-kinetic concerns, but does give pause to re-consider Defense spending priorities in light of the threat environment in which NZ is located and the political realities of being a liberal democratic State where public attention is focused more on internal rather than external security even if the latter remains a priority concern of security and political elites (for example, with regard to sea lanes of communication in the SW Pacific and beyond). That leads into the following:
Trade is an integral component of a nation’s foreign policy, particularly so for a country that is unable to autonomously meet the needs and wants of a early 21st consumer-capitalist society. The usual issue in play when it comes to foreign trade is whether, when or where trade relations with other countries should directly involve the State, and what character should such involvement adopt. Should it be limited to the imposition of tariffs and taxes on private sector export/imports? Should it be direct in the form of investment regulations, export/import controls, and even State involvement in negotiations with other States and private commercial interests? Should the overall trade orientation be towards comparative or competitive value? Most of these questions have been resolved well in NZ, where the government takes a proactive role in promoting private sector NZ export business but has a limited role beyond that other than in regulatory enforcement and taxation.
One change that might help erode NZ foreign policy subordination to trade-focused priorities is to either separate the Trade portfolio from the Foreign Affairs Ministry or to create a Secretariat of Trade within Foreign Affairs. In the first instance “traditional” diplomacy can be conducted in parallel to trade relations, with consultative working groups reconciling their approaches at policy intersection points or critical junctures. In the second instance Trade would be subordinated to the overarching logic of NZ foreign affairs and act as a distinct foreign policy component much like regional and subject-specific branches do now. The intent is to reduce foreign policy dependence on trade logics and thereby better balance trade with other diplomatic priorities.
The larger issue that is less often considered is that of “issue linkage.” Issue linkage refers to tying different threads of foreign policy together, most often those of trade and security. During the Cold War trade and security were closely related by choice: security partners on both sides of the East-West ideological divided traded preferentially with each other, thereby solidifying the bonds of trust and respect between them while benefitting materially and physically from the two dimensional relationship. NZ was one of the first Western countries to break with that tradition, and with its bilateral FTA with the PRC it completely divorced, at least on paper, its trade from its security. That may or may not have been a wise idea.
In wake of events over the last decade, NZ needs to reconsider its position on issue linkage.
Issue linkage does not have to be bilateral and does not have to involve just trade and security. Here again flexibility and agility come into play across multiple economic, diplomatic and military-security dimensions. For example, NZ prides itself on defending human rights and democracy world-wide. However, in practice it has readily embraced trade relations with a number of dictatorial regimes including the PRC, Saudi Arabia, the UAE, Qatar, Iran, and Singapore (which whatever its veneer of electoral civility remains a one party-dominant authoritarian State). It also provides developmental aid and financial assistance to nobility-ruled countries like Samoa and Tonga. The question is how to reconcile these relationships with the professed championing of democracy and human rights
It is not an easy question to answer and is where the “pragmatic when necessary” perspective clashes with the “principled when possible” approach. It might be the case that human rights and democracy can (some might say should) not be linked to trade. But that would mean ignoring abuses of worker’s rights and other violations like child labour exploitation in trading partners. It is therefore a complicated dilemma that might best be resolved via NZ support for and use of multinational organizations (like the ILO and WTO ) to push for adherence to international standards in any trade pact that it signs.
A potentially more fruitful linkage might be between climate change mitigation measures and sustainable production and trading practices. Each trade negotiation could include provisions about carbon reductions and other prophylactic measures throughout the production cycle, where sharing NZ’s acknowledged expertise in agricultural emissions control and other environmental conserving technologies can become part of NZ’s negotiating package.
Alternatively, in the emerging post-pandemic system of trade a move to replace “off-shoring” of commodity production with “near-shoring” and even “friend-shoring” has acquired momentum. Near-shoring refers to locating production centers closer to home markets, while friend-shoring refers to trading with and investing in countries that share the same values when it comes to upholding trade and after-entry standards, if not human rights and democracy. Combining the post-pandemic need to de-concentrate commodity production and create a broader network of regional production hubs that can overcome the supply chain problems and negative ripple effects associated with the pandemic shutdown of production in the PRC, NZ could engage in what are known as mini-lateral and micro-lateral initiatives involving a small number of like-minded regional partners with reciprocal trading interests.
Australia and the Pacific.
Rather than get into specifics, here a broad appraisal is offered.
Australia is NZ’s most important international partner and in many aspects very similar to it. However, beyond the common British colonial legacy and shared Anglophone war experiences they are very different countries when it comes to culture, economy and military-diplomatic outlook. Likewise, NZ shares many traits with other Pacific island nations, including the seafaring traditions of its indigenus peoples, but is demonstrably distinct in its contemporary manifestation. More broadly, Austalia acts as the big brother on the regional block, NZ acts a middle sister and the smaller island States act as younger siblings with their own preferences, attitudes and dispositions.
To be clear: the family-like characterisation is a recognition of the hierarchical yet interdependent nature of the relationships between these States, nothing more. For NZ, these relationships represent the most proximate and therefore most immediate foreign policy concerns. In particular, the English speaking polynesian world is tied particularly closely to NZ via dispora communities, which in many cases involves NZ-based islanders sending remmitances and goods to family and friends back home. Island nations like Samoa and Tonga are also major recipients of NZ developmental aid and along with the Cook Islands are significant tourist destinations for New Zealanders.
Because of their extensive trade relationship and long-standing diplomatic and military ties, NZ understands that maintaining warm relations with Australia is vital to its national interests.
Where it can differentiate itself is in its domestic politics, offering a more inclusive and gentler form of liberal democratic competition that avoids the harder edged style displayed by its neighbor. It can include a different approach to immigration, refugee policy, indigenous rights, and the role of lobbyists and foreign influence in domestic politics, especially when it comes to political finance issues. Without being maudlin, NZ can be a “kinder, gentler” version of liberal democracy when compared to Australia, something that allows it to continue to work closely with its Antipodean partner on a range of mutal interests.
The key to maintaining the relationship with Austalia is to quibble on the margins of bilateral policy while avoiding touching “the essential” of the relationship.For example, disputes about the expulsion of Kiwi-born “501” criminal deportees from Australia to NZ can be managed without turning into a diplomatic rift. Conversely, combating foreign influence campaigns on local politics can be closely coordinated without extensive diplomatic negotiation in order to improve the use of preventative measures on both sides of the Tasman Sea.
The key to maintaining good relations with Pacific Island states is to avoid indulging in post-colonial condescension when it comes to their domestic and international affairs. If NZ truly believes in self-determination and non-interference in domestic affairs, then it must hoor that belief in practice as well as rhetorically. Yet, there has been a tendency by NZ and Australia to “talk down” at their Pacific neighbors, presuming to know what is best for them. There are genuine concerns about corruption in the Pacific community and the increased PRC presence in it, which is believed to use checkbook and debt diplomacy as well as bribery to influence Pacific Island state leaders in a pro-Chinese direction. But the traditionally paternalistic approach by the Antipodean neighbors to their smaller brethern is a source of resentment and has backfired when it comes to contanining PRC expansion in the Southwestern Pacific. The reaction to the recently announced Solomon Islands-PRC bilateral security agreement is evidence of that heavy-handedness and has been met with hostility in the Solomons as well as other island States at a time when the regional geopolitical balance is in flux.
To be sure, NZ offers much developmental aid and humanitarian assistance to its island neighbors and is largely viewed with friendly eyes in the region. The best of way of assuring that goodwill is maintained is to speak to island States as equals rather than subordinates and to emphasize the notion of a Pacific community with shared traditions, cultures and values. It is for the Pacific Island states to determine what their individual and collective future holds, and NZ must respect that fact even while trying to promote principles of democracy, human rights and transparency in government region-wide.
It is mistaken and counter-productive to label New Zealand’s foreign policy as “independent.” A cursory examination of domestic and international factors clearly demonstrates why it is not. Instead, NZ purses a flexible foreign policygrounded in constrained or limited autonomy when it comes to foreign policy-making and which is operationalized based on agility when it comes to reconciling relationships with other (particularly Great) powers and manuevering between specific subjects. It is soft and smart power reliant, multilateral in orientation and predominantly trade-focussed in scope. It champions ideals tied to Western liberal values such as human rights, democracy, transparency and adherence to a rules based international order that are tempered by an (often cynical) pragmatic assessment of how the national interest, or least those of the foreign policy elites, are served.
Balancing idealism and pragmatism in non-contradictory or hypocritical ways lies at the core of NZ’s foreign policy dilemmas, and on that score the record is very much mixed.
This essay began as notes for a panel discussion hosted by https://www.theinkling.org.nz at the Auckland War Museum, November 3, 2022. My thanks to Alex Penk for inviting me to participate.