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New Zealand has deep social and historical connections to Europe. This is reflected in a broad and multi-faceted relationship. Although Europe’s economic performance has been weak in recent years and its demographic profile of an increasingly ageing population seems set to exacerbate this trend, Europe retains significant economic and political strength that will ensure its continuing importance to New Zealand. The European Union (EU) continues to be the most influential actor on the European continent. Its continuing enlargement has been a major driver of change in the 10 new members which joined in May 2004, a process that will continue to bear on developments in the EU’s neighbouring states, particularly in the Balkans. Recent internal controversies over participation in the Iraq war and now around ratification of the European constitution have led to a perception in some quarters that European integration is on the rocks. But the national economies and societies of Europe are already so interlinked that continuing policy integration will remain a practical necessity.
Russia is the other major actor in continental Europe. Its future remains uncertain. While its economy is currently growing strongly, oil and gas predominate and the benefits from growth are unevenly spread throughout society.
Russia’s relations with an enlarged Europe will remain an important consideration for European policy makers.
New Zealand’s relationship with Europe is both of long standing and of contemporary relevance. The EU, and individual European countries, are influential participants in global politics. The EU is increasingly active in multilateral forums where New Zealand’s interests are in play, though coordination of positions among its 25 members is often difficult, and persuading it to modify those positions even more so. Its economic size makes it a central player in the World Trade Organisation. It is a significant development assistance donor in the Pacific. New Zealand shares a common set of values with many European countries, resulting in shared perspectives on many of the most pressing global issues. New Zealand therefore needs, through dialogue and other engagement, to maintain its ability to exert influence in Europe and this has to be exercised both centrally (i.e. with the Commission and other EU organs) and bilaterally with individual member states.
Pursuing New Zealand’s interests in Europe requires a strong relationship with the EU. We continue to expand our dialogue with its institutions, in particular by developing links to the European Parliament and the Council Secretariat in addition to our longstanding links with the European Commission. Regular six-monthly consultations with the EU Presidency at Foreign Minister level represent an important opportunity to maintain and develop high-level contact with the EU.
Europe remains a major market for New Zealand agricultural produce; it is an important market for services – tourism in particular – and a significant source of investment and ideas; and, whether its countries are considered collectively or individually, it is a key player in global politics.
The collective EU is New Zealand’s second largest trade partner after Australia, and our largest market for sheepmeat and dairy products. Given the strategic importance of the EU market for our agricultural traders, the evolution of its Common Agricultural Policy remains a central concern for New Zealand. Nearly 50% of the world’s non-military scientific research is undertaken in the EU, making it of significant potential as a partner in science and technology. Europe’s high quality educational infrastructure, and European governments’ commitment to best practice in education also offer useful opportunities for New Zealand.>
The UK remains our most important partner in Europe. The relationship is our oldest and closest and is broad based and extensive, encompassing a significant range of trade, political and security cooperation, education, science and technology and people-to-people links.
Germany is a major player in the EU and a significant global actor. It is an important market for key New Zealand exports and for tourism, and there are strong science and education linkages. Germany also holds out significant investment potential for New Zealand.
The bilateral relationship with France is longstanding, mature and dynamic, with new links evolving in a variety of areas such as science and technology, education and culture. France’s Pacific territories give our relations an important regional dimension of value to New Zealand.
We maintain solid working relationships with others in the European Union. Relations with Italy, Spain, the Netherlands, and the Nordic countries are important, frequently reflecting common perspectives or values. The new member states of the European Union will in time play an increasingly significant role and our recently established post in Warsaw gives us the tools to develop our links with the largest of these, Poland.
Russia’s continuing importance in world affairs requires our ongoing attention across a range of international issues. Its economy is expanding rapidly, and we need to ensure that we remain alert to trade opportunities in what is a challenging market.
New Zealand is represented by nine Embassies in Europe with an emphasis on representation in EU Member States. We have Embassies in Berlin, Brussels (which also covers relations with the European Commission and other institutions), Madrid, Moscow, Paris, Rome, The Hague and Warsaw, and a High Commission in London. We have Consulates-General in Frankfurt, Geneva, Hamburg, and Milan, and are represented by a network of Honorary Consuls throughout the region. New Zealand is accredited to Austria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Greece, the Holy See, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Norway, Portugal, Sweden, Slovenia, Slovakia, Ukraine and certain other CIS members.
New Zealand’s economic links with the EU remain vitally important, especially our sheepmeat (alone worth some NZ$1.4 billion annually) and dairy trade. Overall our bilateral trading relationship is healthy and robust with both parties committed to resolving any differences constructively. Officials have regular economic dialogues with the European Commission (EC) on agricultural trade issues, fisheries and technical sanitary and phytosanitary issues.
For the most part we look to protect our existing market access into the EU from emerging regulatory and other challenges. For example, the shift in May 2004 to a first-come, first-served import system for our sheepmeat exports has led to data reconciliation issues (and potential quota loss), which we are working to resolve. Similarly, an EC regulation that splits our butter tariff quota into two biannual tranches was unnecessary but reflects the market management approach.
On the positive side, the recently negotiated EU enlargement trade compensation will give us some useful increments to our sheepmeat and butter quotas and expand our high quality beef quota from 2006.
Europe, and within it, the United Kingdom, is New Zealand’s principal wine export market. Existing EU laws are trade restricting and effectively limit the sale of certain New Zealand wines. Negotiations for a comprehensive wine agreement to address this are expected to begin in November.
The recently concluded agreement between the EU and New Zealand on air services is designed to bring certain elements of New Zealand’s bilateral air services agreements with EU member states into compliance with European law. It opens the way for future bilateral negotiations with member states and is an important step towards a comprehensive agreement between New Zealand and the EU in the air services area.
New Zealand has working holiday schemes with most of the older EU members, with Norway and with the Czech Republic. Cabinet approval exists for negotiations with Greece, Spain, Poland, Slovenia, and Hungary. Consideration is being given to seeking Cabinet approval to negotiate agreements with Estonia, Latvia, Lithuania, Cyprus, Slovakia, Luxembourg, and Portugal.
Since the 1999 “communitisation” of the EU’s Schengen agreement on immigration, New Zealanders’ visa-free access to the EU has relied on an agreement with the European Commission not to seek abrogation of EU member states’ bilateral 3-month visa-waiver agreements with New Zealand. In 2003 then Commission President Prodi gave an assurance to Prime Minister Clark that the Commission would seek a solution based on reciprocal six-month visa-waivers for the Schengen area as a whole. A more permanent solution was to have been found under the new constitutional treaty, but the hiatus on that front means that the undertaking on New Zealand and the Schengen area has yet to be progressed.
Increasingly our economic links with Europe, including in education, science and technology, are reliant on facilitating contact between individuals and organisations at the non-governmental level (although government-to-government contact continues to play a key role). This requires a strong “NZ Inc” approach and close coordination between agencies in New Zealand and offshore.
New Zealand has so far pursued a policy of accrediting representatives to all the EU’s member states. We have usually done so in advance of their joining the EU. Accreditation to Bulgaria and Romania, which are due to join the EU in 2007, is a matter to be resolved. Other Balkan countries are likely to follow in successive stages of EU enlargement. Apart from historical people-to-people links with Croatia and our current peacekeeping contributions in Bosnia and Kosovo, New Zealand’s ties with South Eastern Europe are limited, as are ties with Ukraine.
The wider Middle East region remains a strategic fulcrum, the stage on which major international political and economic challenges are being played out. New Zealand aims to play a constructive role in regional security issues and maintains a substantial ongoing NZDF deployment to Afghanistan.
New Zealand exports to the region, worth over a billion dollars, are mainly traditional foodstuffs and the region remains the prime source of New Zealand oil imports.
New Zealand is represented in the region by Embassies in Ankara, Riyadh and Tehran. An Embassy in Cairo is to be opened around the middle of next year. We have a Consulate-General in Dubai and a number of Honorary Consuls supporting the work of the Embassies in their accreditations to Afghanistan, Bahrain, Egypt, Israel, Jordan, Kuwait, Oman, Qatar and United Arab Emirates. The Embassy in Paris is accredited to Algeria and the Embassy in Madrid is accredited to Morocco. The Embassy in Ankara represents New Zealand to the Palestinian Authority.
New Zealand has since 2002 made a major contribution to Afghanistan, centred on the Provincial Reconstruction Team in Bamyan Province and the deployment of SAS forces. The PRT commitment currently extends to September next year. Despite progress in many areas, Afghanistan remains heavily dependent on outside support. NZAID support targets priority areas like governance reform, human rights and agricultural development.
The situation in key parts of Iraq remains extremely troubled by a bloody insurgency. There are plans for full constitutional elections in December. US-led foreign troop contributors must balance support for the search for security and stability in Iraq with the desirability of withdrawing from Iraq as soon as practicable. An NZDF officer is serving with the United Nations Assistance Mission in Iraq (UNAMI). New Zealand support for reconstruction is now mostly channelled through the UN Development Programme.
With the election this year of Mahmoud Abbas to replace Yasser Arafat as leader of the Palestinians, and Israel’s withdrawal of settlers from the Gaza Strip and parts of the northern West Bank in August, there are encouraging prospects for the revival of the Middle East Peace Process in accordance with the Road Map developed by the Quartet (US, EU, UN, Russia). The situation remains, however, difficult and fragile. New Zealand has increased its financial support for Palestinian capacity-building towards nationhood, as this is an essential basis for a two-state peace deal.
Israel's apology for the involvement of its agents in a fraudulent attempt to obtain a New Zealand passport has cleared the way for a resumption of normal friendly relations. The accreditation of Israel’s Canberra-based ambassador is expected to be followed later in the year by a resumption of normal official contacts.
The relationship with Turkey is built on the annual commemorations of ANZAC Day at Gallipoli. New Zealand officials are working in close cooperation with Australian and Turkish counterparts to place the organisation of the Gallipoli commemorations on a sound, new footing looking to the future, and expect a firm outline to emerge over the next few months.
The relationship with Egypt is set to be boosted by the establishment of a resident New Zealand Embassy in Cairo. Based on current expectations the post will be ready for opening in August next year. The establishment of the Cairo Embassy will open the way for further cross-accreditations in the Middle East and African regions, including the African Union Secretariat and possibly Iraq and Syria.
The development of New Zealand’s relationship with Iran is complicated particularly by widely shared concerns about Iran’s nuclear programme. In pursuing a broadening political and economic relationship with Iran, New Zealand continues to stress the need for Iran to restore confidence about its intentions amongst the international community and also to address concerns about human rights.
The relationship with the six members states of the Gulf Cooperation Council – Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates and Oman - is largely free of problems and based on mutually beneficial trade and economic exchanges. Besides being good markets for traditional New Zealand products and the source of most of our oil imports, these countries offer great prospects for the sale of New Zealand manufactured products and services, including education and tourism. Emirates Airlines operate 28 flights weekly to New Zealand, which offer major new opportunities for exchange. Joint Ministerial-level Economic Commissions with Saudi Arabia and the UAE are due to be held before the end of the year.
Algeria, covered by an accreditation from the embassy in Paris, has re-emerged as a major market in the region. Morocco (covered from the embassy in Madrid) and Libya may also offer prospects for increased trade.
Our relationship with Africa is modest in scope, based on traditional Commonwealth links supplemented by UN contacts. The region is attracting increasing attention in New Zealand, however, due to recurring security and humanitarian crises (which engage the international community), a growing refugee community and developing business interests.
New Zealand’s relationship with South Africa is the keystone of our developing connections with the region. South Africa dominates the southern African economy. It is a major power in African institutions and initiatives such as the African Union, the Southern African Development Community, and the New Partnership for African Development.
New Zealand’s sole African Embassy is located in Pretoria. New Zealand is accredited to Botswana, Kenya, Lesotho, Mauritius, Mozambique, Namibia, Nigeria (through the High Commission in London), Swaziland, Tanzania, Zambia and Zimbabwe. A number of Honorary Consuls support the Embassy’s work in the region.
Restoration of sound political and economic management in Zimbabwe depends to a large extent on South African influence with the Mugabe regime. New Zealand is pursuing a programme of diplomatic action against the Mugabe regime and its Operation Murambatsvina (“Clear Out Rubbish”), which has rendered hundreds of thousands of people homeless and destitute. Although it was not possible to bring about a cancellation of the Black Caps cricket tour of Zimbabwe, the Government decided that visas for the Zimbabwe cricket tour of New Zealand in December would be withheld and that tour has been cancelled.
Various African countries are severely afflicted by natural disaster, war, poor governance, disease, and acute underdevelopment. New Zealand has responded substantially to humanitarian emergencies in Sudan (Darfur) and Niger and provides support through a number of multilateral channels including the World Food Programme. It has also contributed NZDF personnel to UN missions in Sierra Leone, Sudan and other countries. The opening of the post in Cairo offers also a prospect for strengthened representation in Africa. The High Commission in London maintains a cross-accreditation to Nigeria, the most important country in West Africa.
Latin America is a region of considerable population size, economic potential, and influence in international affairs. The rise of democracy in Latin America has not been untroubled, but the trend is for continued political and economic progress, although this is uneven.
New Zealand’s Latin America Strategy has been in place since 2000. Its aim is to increase links between New Zealand and the region in three broad areas: political and diplomatic; economic and trade; and people-to-people contacts. The Strategy is supported by a fund of $250,000 per year – the Latin America Strategy Fund (LASF) – to encourage people-to-people links in particular. The Strategy focuses on six priority countries (Argentina, Brazil, Chile, Mexico, Peru, Uruguay). The past five years have seen an increase across the board in New Zealand’s linkages with the region.
Our interest is in keeping up the momentum in raising New Zealand’s profile and promoting greater economic and trade and people-to-people contacts with our six priority countries in the region. Specific interests over the coming year are to ensure the entry into force and benefits for New Zealand from the Trans-Pacific Strategic Economic Partnership Agreement (TPSEPA) with Chile, Brunei and Singapore and to use the recently established Joint Experts Group with Mexico, our largest trade partner in the region, to advance trade and economic liberalisation.
New Zealand has Embassies in Argentina, Brazil, Chile and Mexico and a Consulate-General in Sao Paulo, Brazil. Our Embassies are accredited to Colombia, Cuba, El Salvador, Guatemala, Paraguay, Peru, Uruguay, and Venezuela, and are supported by a network of Honorary Consuls in the region.
The TPSEPA was signed on 18 July and is due to enter into force on 1 January 2006, after consideration by the New Zealand Parliament (and the Chilean Congress). A National Interest Analysis has been presented to Parliament (see separate brief below).
June this year saw the first meeting of the Joint Experts Group (JEG) with Mexico, which aims to identify and discuss issues and areas for improvement and cooperation to further promote bilateral economic relations. The group, which consists of officials plus key business sector representatives, will next meet in November in Mexico.
Official Foreign Policy consultations will take place with Argentina (October) and Peru (November) in Wellington. It is customary for the visiting Foreign Ministry delegations (led by a Deputy Secretary of Foreign Affairs) to seek a call on the Minister of Foreign Affairs or Associate Minister.
The current three-year phase of the Latin America Strategy will conclude in June 2006. In December 2005 Cabinet will need to consider a review of the Strategy and recommendations in relation to the period from June 2006, including funding for the Latin America Strategy Fund.
A report by the Foreign Affairs, Defence and Trade Select Committee on New Zealand’s relations with Latin America was presented to Parliament on 8 August. This is supportive of the Latin America Strategy but makes a number of recommendations on ways to improve relations with countries of the region, which the Government will need to consider.
The APEC Leaders Meeting in November will provide an opportunity for high-level meetings with the Latin American APEC members Chile, Mexico and Peru.
Elections are to be held in Chile at the end of this year and a new President will be inaugurated in March 2006. New Zealand was represented by the Prime Minister at the last Presidential inauguration in Chile.
