Old friends in a changing world

Rosemary Banks




This article first appeared in New Zealand International Review, Oct/Nov edition, 48:6, 2023

rosemary cropped
Rosemary Banks assesses one of New Zealand’s most essentially important relationships, that with the United States.

New Zealand’s relationship with the United States has had its ups and downs in the last 50 years. But it is today completely normalised. Both sides have aspirations that are not necessarily met, including, in New Zealand’s case, a free trade agreement. But there is basic alignment of purpose. Nonetheless, it is imperative that New Zealanders understand the way in which the United States has evolved and changed over recent decades. The United States believes that in the changed geo-strategic environment in the Indo-Pacific region, a substantial step up in defence co-operation by all supporting countries is now becoming imperative.

In this article I will cover the way our relationship with the United States has evolved in recent years; what we need to understand about the United States, the way they view us and what they expect and hope for from us. I will explore the convergence of United States and New Zealand interests in the Indo-Pacific region, and how we add value. Then I will turn to the risks ahead for us in this relationship, how it needs to be managed and nurtured to avoid New Zealand being misunderstood or worse still, marginalised.

Let me begin with a quick trot through the way New Zealand’s relationship with the United States has evolved. I shall start with a quote:

New Zealand is anxious to play a helpful and constructive part in the world. But if we’re to seek a wider international role, we need the confidence, assurance and strength that comes from a sound and developing economy. And for this we need the cooperation and the understanding of our friends, and above all of the United States.

Any guesses as to when this might have been said? It was in fact Prime Minister Keith Holyoake in 1968. His sentiments would have been widely shared in the post-war decades when memories of the United States coming to the defence of Australia and New Zealand in the Pacific War were still fresh.

But here is a surprise — in that same speech, at the University Club in New York, Holyoake had the prescience to recognise threats from within New Zealand to the 1951 Pacific Security (ANZUS) Treaty, which had been at the centre of New Zealand’s foreign policy for twenty years. He went on to acknowledge that:

There is always a danger that a purely military alliance between a great power and a small state like New Zealand will give rise to misunderstandings… there will always be hot debate by people who feel that the true national interest has been submerged, that essential decisions are all taken by the major partner and that foreign policy is no longer ‘independent’.

Many of us lived through the rupture of the ANZUS agreement in the mid-1980s. This decision was taken by the government of the day in response to a growing anti-nuclear movement in New Zealand, and disillusionment with the United States as a result of the Vietnam War. It put the bilateral relationship in the chiller for an extended period, during which our political and high level official access in Washington was strictly limited.

I shall pass swiftly over this sterile period in the relationship, now forgotten by most but not all in the US system, and fast forward to the two documents that signalled the thaw. The Wellington Declaration between Prime Minister John Key and Secretary of State Hillary Clinton, signed in 2010, heralded a new New Zealand–United States ‘strategic partnership’. This was expanded when the more substantive Washington Declaration followed in 2012, opening the way for a resumption of defence contacts after a 27-year suspension of co-operation. Jumping into the present, I would describe New Zealand’s relationship with the United States as completely normalised. By this I mean that we do not get everything we want from them — for example, in the case of the United States, a free trade agreement — and nor do they get all they would like from us, for example, a stronger commitment to investing in defence and security.

Needed understanding
I have galloped through these phases of our history, to acknowledge past differences as well as the positives. Let me turn now to what we need to understand about the United States, the way it has evolved and changed over recent decades. I have spent a total of ten years of my foreign service life posted in the United States, spanning a forty-year period from 1983 to 2022. It is through this lens that I offer my short version of the way the United States in its global role has changed.

My first posting in the United States was to the United Nations in New York. Ronald Reagan was President. The world was still divided along the fault lines of the Cold War. There was no question at that time as to where New Zealand sat. We were firmly in the US camp as a still active member of ANZUS.

After the wall between the East and West came down in 1989, the United States revelled in its victory over communism and dominated the global power structure. As a book lover I find the book stores to be a window into what the thinking part of society is thinking about. In that early post-Cold War period the shelves were full of books bristling with self-confidence with such titles as The American Age and Pax Americana.

When I returned to New York, in 2005 this self-confidence had been punctured by the 9/11 attacks on the Twin Towers and the Pentagon. The self-congratulatory tone of the non-fiction shelves had evaporated. A best seller then was Why do people hate America?. As you know, more reputational damage was to come, after the controversial Iraq intervention.

Practitioners of realpolitik such as Henry Kissinger — who turned 100 in March — would probably dismiss this, but it seems to me that nations, like economies, are affected by animal spirits. Keynesian economics has it that confidence, or lack of it, can drive or dampen economic growth because people make decisions based on emotion or intuition rather than reason.

In just such a way, confidence can drain out of policy-makers, even when the facts of the situation are still in their favour. In the flagship publication of the US Council on Foreign Relations, Foreign Affairs, the May/June issue was titled ‘The Nonaligned World — the West, the Rest and the new Global Disorder’. Several of the featured articles were about the shift of power away from the United States to a more multipolar distribution. One of the articles went against this grain and was titled ‘The myth of multipolarity — American power’s staying power’. After describing US peak confidence and global dominance in the 1990s, the authors, two professors, wrote:

That was then. Now American power seems much diminished. In the intervening two decades the United States has suffered costly failed interventions in Afghanistan and Iraq, a devastating financial crisis, deepening political polarisation and in Donald Trump, four years of a president with isolationist impulses.

Widespread view
The authors acknowledged the now widespread view that the unipolar moment is over, that the Russian invasion of the Ukraine showed that the United States could no longer enforce the international order it had built. But they then went on to reject the idea that the relative loss of US influence means we now inhabit a multipolar world.

These two professors do admit that the United States share of global power is smaller than in the past, but insist that on all the critical metrics it remains far ahead of China or any other possible competition. On another upbeat note, they point to the convening power that the United States has, to build and expand alliances and coalitions for co-operation. We can see that this has been happening in our Indo-Pacific region.

To return to my point about animal spirits, what struck me in working with the Biden administration was its heightened sensitivity to the views of other countries. And palpable geo-strategic anxiety. It hurt that China and Russia were successfully spinning the narrative of US terminal decline into the global South. There was real anxiety over US ability to manage a working relationship with China — to ensure that competition did not spill over into conflict. And then came the challenge of Presidents Xi and Putin’s February 2022 declaration of friendship with no limits. Soon after there followed by Russia’s invasion of Ukraine and disappointment that China so uncritically repeated Russian propaganda.

Growing uncertainty
Polling shows that there is growing uncertainty, questioning and even resistance to America’s global role. A recent survey of millennials by the well-respected Chicago Council on Global Affairs found that Generation X, Millennials and Gen Z were less worried about China and Russia than their elders and were evenly divided on whether the United States should play an active part in world affairs or stay out.

Going back to our bookshop for a sample of foreign policy best sellers over the past year, we have Fareed Zakaria with The Post American World, and another title expressive of a changing national self-concept The Frugal Superpower — America’s Global Leadership in a Cash strapped Era.

So what does this mean for countries like New Zealand? It means that in these uncertain times, the United States is looking to its old and dependable friends for reassurance that they have understood the new geo-strategic environment, will respond to it and will go on being dependable. This is my segue into how the US views New Zealand in this changed and fast changing world. I should be more specific: I really mean how does the policy-making machinery in Washington DC view us?

Our brand is a positive one, but there are still a few bits of baggage in the closet. Let me start with the good stuff. For the Biden administration, New Zealand ticks many of the boxes it is looking for when it weighs up the value add its many partners can offer. We come with the advantage of being one of the world’s oldest continuous democracies, at a time when the United States is increasingly worried by the undermining of democracy around the world, including in the United States.

New Zealand has new salience for the United States as it turns its attention to the Pacific Islands region, and seeks out our advice (and Australia’s) as to how best to engage there. And we have won praise and recognition from the United States for our contributions to help support Ukraine in its resistance to the Russian invasion. The administration sees New Zealand as helpfully progressive in the climate change arena; we are known supporters of human rights and supporters of the multilateral system and the international rule of law.

Exciting dimension
An exciting new dimension to the relationship which adds to New Zealand’s positive profile is our space co-operation with the United States. Rocket Lab has for several years now been launching payloads on behalf of US agencies. Last year a new Space Framework Agreement was signed with the United States to open the way for more collaboration between NASA and our Space Agency on the peaceful uses of outer space.

We have also won credits with the Biden administration for New Zealand’s early and helpful input to shaping the Indo-Pacific Economic Framework, abbreviated to IPEF. This will create a coalition of fourteen countries committing to deeper economic co-operation, including all our major trading partners in the region except China. So the relationship is moving ahead, and there is goodwill from the current team in Washington to make this happen.

There is also a mismatch between what we would most like to have from the United States and what they would most like to have from us. For New Zealand, trade access has been at the top of our list of asks of the United States. But we have had to swallow our disappointment at our failure to persuade the United States to give us a free trade agreement.

We argued long and hard — making the case that Holyoake made more than 50 years ago. That there are geo-strategic reasons to strengthen New Zealand’s economy by allowing us privileged access to the US market so that we can remain strong and able to contribute to regional and global stability. Unfortunately, innate and growing suspicion in the United States of traditional free trade agreements, and trade in general, is now a feature of both Republicans and Democrats, and the best we can aim for is the off course substitute of the Indo-Pacific Economic Framework.

Security desires
Let me turn now to the question of what the United States hopes for and expects of New Zealand. In a nutshell, what it most wants from New Zealand is a stronger defence and security capability, especially in the Pacific.

Just over a year ago we were basking in the afterglow of a successful visit to the United States — west and east coasts — by Prime Minister Jacinda Ardern. As in the normal way of these official visits, a Joint Statement was agreed for release after the she had met President Biden in the Oval Office. Such statements are intended to set a future course for the bilateral relationship. Our formal bilateral statement is sub-titled ‘A 21st century Partnership for the Pacific, the Indo-Pacific and the World’. It contains the following commitments: ‘As the security environment in the Indo-Pacific evolves, so must our defense cooperation… security and defense will become an ever more important focus of our strategic partnership.’

These are fine words, but as my father used to say, they butter no parsnips. To mix metaphors quite shamelessly, the new elephant in the defence and security room for our government and senior policy makers is AUKUS. This arrangement was reached in great secrecy among the United States, United Kingdom and Australia and launched on an unsuspecting world in September 2021.

In the media and the public mind, this agreement is all about equipping Australia with nuclear-powered (but not armed) submarines. What is often overlooked is that there are two parts to AUKUS — the second part, in principle is open to New Zealand and to US allies such as Canada, Japan and South Korea. It is about sharing research into advanced defence technology.

New Zealand has from the outset had an open invitation to join the non-nuclear work stream but so far this has proven too tricky for our political masters to accept. There have been ambiguous messages from Prime Minister Chris Hipkins, who in March when meeting Australian Prime Minister Anthony Albanese dismissed AUKUS as an arrangement that New Zealand would never join. Defence minister Andrew Little was later more nuanced, recognising the value for us of being on board with the new technology co-operation under the non-nuclear pillar of AUKUS. This is a space to watch.

US reasoning
Why does it matter so much to the United States that New Zealand should be able to bring a credible defence capability to the relationship? After all our input is always going to be at the margins compared with fully fledged allies like Australia or Japan, both of whom are both massively increasing defence expenditure.

The answer is that the United States believes the changed security environment in the Indo-Pacific region calls for a step up in defence co-operation by all countries that, like the United States and New Zealand, are committed to maintaining an open and free Indo-Pacific region. This includes freedom of navigation, on which so much of New Zealand’s trade depends.

There is another reason, too, for United States’ heightened attention to New Zealand defence policy. The Biden administration has reaffirmed its willingness to play a leading role in ensuring global stability, after the Trump years of withdrawal from global responsibility. However, the White House knows that it no longer has the social licence or the staying power to do his alone. It is looking to all its allies and friends to step up, work alongside the United States and make a bigger contribution to maintain the international order on which smaller countries like New Zealand depend. This at a time when China and Russia have openly declared their intention to reshape the world order according to their values — which are not those of New Zealand or the United States or any of our other close partners, such as Australia, Singapore or Japan.

Now for the risks to our essentially important relationships of New Zealand being misunderstood or marginalised. When the AUKUS agreement was announced in 2021, the Australian newspaper quoted an unnamed Pentagon official who described the Agreement as ‘a new ANZUS that sidelines New Zealand’. I am fairly sure I know who that Pentagon official was, and he was expressing a frustration which although not widespread was shared by some others in the Pentagon and elsewhere. Although most would not say it out loud.

This risk to New Zealand of being sidelined should not be dismissed. It comes in part from a residual uncertainty on the part of the United States as to whether they can truly count on us. Usually we do the right thing in US eyes, but it can take us a long time to get there. And sometimes we duck for cover.

Inevitably, on account of being a Five Eyes partner and geographically next to Australia, we are consciously or unconsciously compared with the West Island. This, of course, is unfair, and Americans struggle to understand how different the mentality is in each country. The way that Australia’s history and its proximity to Asia makes its national defence a top priority for which there is a high level of social licence.

In New Zealand we do not feel that cold wind of threat at our national borders in the same way. A wonderful Australian, Allan Gyngell, a good friend to New Zealand and in his role as head of the Australian Institute of International Affairs also to NZIIA, sadly passed away early in March. When he spoke to us here Christchurch in March 2018 in his succinct way, he summed up this difference of outlook. he said Australia felt itself to be strategically vulnerable but economically strong, whereas by contrast New Zealand felt strategically secure but economically insecure. Hence Australia’s full throated and bipartisan commitment to AUKUS while New Zealand hangs back, partly out of concern not to alienate China as our main trading partner.

There will be reputational risk to New Zealand if we recognise the changed geo-strategic environment, but make no policy response. Already the heightened risks and dangers to our national interests have been spelled out in the clearest terms yet by the 2021 Defence Assessment. Australia and the United States in particular will be watching to see how these assessments translate into future defence spending. So will our other regional partners — Singapore, Japan and South Korea — who are all significantly stepping up their defence budgets.

If we are not seen as also making a credible effort to respond to our more dangerous strategic environment, to bring a defence capability to joint operations, we will be putting ourselves at risk of being marginalised by our security partners. We are not there yet, but there is a tricky time lag between change to our security environment and public understanding of this.

Ideally, there is political courage to lead rather than to follow public opinion, but these issues are a minefield politicians would rather avoid if they can. It is unfortunate that any debate of defence or security soon defaults to our anti-nuclear policy. Or to our much-vaunted independent foreign policy.

Now for some observations on the way we have for most of our modern history described our foreign policy as ‘independent’. For a deeper dive into this dimension of our foreign policy history, Malcolm McKinnon’s book Independence and Foreign Policy, first published in 1993, is still the gold standard. McKinnon points out that the concept of an ‘independent foreign policy’ dates back to the first Labour government in power in 1935–49, but its meaning has evolved over the decades.

He identifies the core components of our original expression of an independent foreign policy back in the 1930s. These were independence of outlook, a belief in collective security (which at that time meant support for the League of Nations) and a view that international political dangers could be alleviated by addressing poverty and social inequality.

But fast forward to the 1980s, the last decade McKinnon examines before his book was published. He observes that ‘For many, independence in foreign policy in the 1980s became synonymous with the anti-nuclear policy… therefore the word acquired opaque qualities. It was used in such rhetorical and ritualistic ways that its meaning and historical context were obscured’.

I would argue that there continues to be a good deal of opacity and obscurity around the term ‘independent foreign policy’ today. We are better at defining it negatively, that is, what it is not rather than what it is. For example, former prime minister Ardern in one of her foreign policy-focused speeches said ‘Our independent foreign policy has never meant that we pursue our objectives on our own.’

Foreign minister Nanaia Mahuta emphasised this point in a speech on 3 May when she stated that ‘being independent does not mean acting independently’. She noted that our independence should not be confused with isolation, neutrality or a fixed and pre-determined view of how we will act on a particular issue. Let us hope our close friends understand the nature of our ‘independence’ as we move from a grey world into a more black-and-white one that will make our future choices harder.

Rosemary Banks is a former diplomat who, most recently, was New Zealand’s ambassador to the United States (2018–22). This article is the edited text of her address to the NZIIA’s Christchurch Branch at the University of Canterbury on 31 May 2023.


NZIIA membership is open to anyone interested in understanding the importance of global affairs to the political and economic well-being of New Zealand.