This background paper outlines key points about the ‘Step Change’ programme of major upgrades to the Ministry of Foreign Affairs and Trade (MFAT) over 2008-12. It explains seven key areas of challenge facing New Zealand internationally, and indicates how new Government funding will be used to meet these.
The 2008/10 changes proposed under the ‘Step Change’ are described in the pages following under headings summarising the seven major areas of challenge facing New Zealand foreign policy-making.
Step change funding package: new money 2008/09 – 2012/13
Year |
08/09 |
09/10 |
10/11 |
11/12 |
12/13 |
TOTAL |
|---|---|---|---|---|---|---|
|
Operating Expenditure |
25.5 million |
68.3 million |
104.6 million |
139.9 million |
184.6 million |
523.0 million |
|
Capital expenditure |
9.0 million |
37.0 million |
25.0 million |
15.6 million |
11.3 million |
98.0 million |
Context
New Zealand has close relationships with most Pacific countries, especially in Polynesia. It has specific responsibility for Tokelau and constitutional links to Niue and the Cook Islands.
New Zealand is an active player regionally in Pacific affairs. It took a lead role in the development of the Pacific Plan regional cooperation and integration initiative, and is a major participant in the Regional Assistance Mission in Solomon Islands.
The Pacific is the primary focus for the work of the NZ Agency for International Development (NZAID), a semi-autonomous agency of MFAT. NZAID’s funding is handled separately and is not covered in this paper.
New Zealand ’s objective in the Pacific is to promote security, economic growth, good governance and sustainable development. This recognises not only the needs of Pacific countries, but also the fact that New Zealand’s own future depends on a stable, prosperous Pacific neighbourhood.
MFAT and the Pacific
New Zealand has 10 high commissions or other representative offices in Cook Islands, Fiji, Kiribati, New Caledonia, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga and Vanuatu.
These posts work closely with the 16 policy and support staff employed in MFAT’s Pacific Division in Wellington. The division develops Pacific policy, manages the New Zealand end of the relationship with Pacific states, and liaises with Pacific regional organisations, notably the Pacific Islands Forum and the Secretariat of the Pacific Community (SPC).
MFAT’s workload in the Pacific is growing rapidly in the face of demands including:
Planned changes
Initiatives being prepared by MFAT to develop New Zealand’s relationships in the Pacific over the next two years include:
Context
Global dynamics are changing as emerging powers such as China, India, Brazil and South Africa play increasingly significant regional and international roles. Regional processes and groupings – for instance, the European Union and the East Asia Summit – are becoming more numerous and more important.
Fast-developing regional arrangements in Asia have particular implications for New Zealand. Current regional or sub-regional institutions in the region include APEC, ASEAN, and the associated ASEAN Regional Forum (ARF) and East Asia Summit (EAS).
As a small and geographically isolated country, New Zealand does not find it easy to make its voice heard within these regional groupings. It must make extra diplomatic effort to ensure that its point of view is heard and understood.
This effort has to include a strong focus on New Zealand’s ‘near neighbourhood’ of the Pacific. Effective Pacific regional processes contribute to long-term growth, human development, good governance and stability, all of which benefit New Zealand as well as the wider region. Many of these processes are managed through the Pacific Islands Forum and other regional agencies.
MFAT and regionalism
Pacific regional issues are managed by New Zealand’s 10 Pacific diplomatic posts and by its Pacific Division in Wellington.
Asian regional issues are managed by New Zealand’s 13 Asian diplomatic posts and by its Asia Division in Wellington.
More capacity is needed at posts and in Wellington to ensure New Zealand can maintain and develop its close interests in the Pacific, and to deepen links with Asia.
Planned changes
Initiatives being prepared by MFAT to develop New Zealand’s regional relationships in the next two years include:
Context
The pace of global trade negotiations is increasing as countries realise that, in a globalised environment, they can ill afford to be isolated from trade and investment markets.
The global Doha Round of the World Trade Organisation (WTO) is moving slowly, though there remain hopes that a result can be achieved. New Zealand still regards a successful conclusion as its top trade priority.
Meanwhile, free trade agreements (FTAs) and similar agreements are being developed at a fast rate. Globally, more than 400 FTAs either exist or are being negotiated.
This situation presents a challenge to small market economies such as New Zealand that must participate in FTA processes but have limited resources to do so.
MFAT and trade
The task of MFAT on trade issues is to provide access for New Zealand exporters by working to:
New Zealand currently has FTAs or similar trade agreements with Australia, Singapore, Thailand, Chile, Brunei and now China. It is negotiating on agreements with the Gulf Cooperation Council (GCC) and ASEAN. It is in discussion about trade agreements with Korea, Mexico and India. And it is keen to negotiate agreements with Japan and the United States.
Trade negotiations are carried out at a broad level by MFAT’s Trade Negotiations Division and by trade specialists in the Legal Division and a group of lead negotiators. Together these employ some 30 people. Free trade negotiations have dedicated project teams that are supported by a common pool of senior trade officials. There are specialist trade diplomats in various overseas posts, particularly Geneva (the headquarters of the WTO), where there are six.
New resources are required to pursue trade negotiations with the US, Japan, India and Korea. FTA negotiations such as these are very resource intensive compared with the WTO process, where 150 countries can be dealt with simultaneously. Extra resources are also required to implement and monitor the outcomes of FTAs.
Planned changes
Initiatives being prepared by MFAT to build New Zealand trade in the next two years include:
Context
The Government and the private sector recognise that New Zealand needs to be deeply engaged internationally to lift its economic performance – as highlighted during Export Year 2007. That requires an ‘NZ Inc’ effort across a range of sectors and government agencies. This is partly a matter of pursuing trade agreements to open markets, but it goes further to include factors critical to New Zealand’s competitiveness such as:
MFAT and new markets and networks
Creating conditions not only for trade, but also for foreign investment relationships and knowledge transfer requires more intensively managed and coordinated input from all NZ Inc agencies offshore. MFAT works closely with NZ Trade and Enterprise (NZTE) and other economic agencies in this area, providing sophisticated and integrated in-market business support including through building international linkages in trade and investment, education, migration, science and technology, and promotion in emerging markets. MFAT leads this “whole-of-government” approach to delivering the Government’s economic transformation agenda (ETA) offshore, particularly through the contribution its Heads of Mission make through diplomatic facilitation and high-level access to decision-makers
As leader of the Government’s whole-of-government offshore engagement, MFAT plays a key role in leveraging New Zealand’s international connections to:
This role is delivered mainly through New Zealand’s network of overseas missions, which operate collaboratively with other government agencies under the ‘NZ Inc’ Framework for Operations Offshore.
MFAT’s network provides local insights, matched with an understanding of New Zealand’s needs, to support the private sector and other government agencies overseas. MFAT work in this area includes helping New Zealand firms secure access to decision-makers and addressing shifts in market conditions around sustainability.
MFAT works especially closely with NZTE, including in locations where NZTE is not represented.
Planned changes
Initiatives being prepared by MFAT to build new markets and networks in the next two years include:
Opening of a Consulate-General in Brisbane and establishing an MFAT diplomatic presence at the existing Consulate-General in Melbourne to boost New Zealand’s economic and trade interests.
Opening of an Embassy in Stockholm. Sweden is an influential member of the EU and shares a number of foreign policy interests with New Zealand. It is also a global leader on innovation issues of direct relevance to New Zealand’s economic performance. A Stockholm embassy will allow the New Zealand post currently accredited to the Nordic countries ( The Hague) to focus more clearly on its core relationships with the Netherlands and Denmark, both important EU members.
Provision of additional resources for market intelligence work and assistance to individual exporters in emerging economies outside Asia (such as in Eastern Europe, the Middle East and Africa) and in the Pacific, where there are smaller but still vital markets for New Zealand exporters.
Context
Over the past decade, security has become an increasingly significant item on the international relations agenda.
‘Security’ is a broad subject, including initiatives related to terrorism and border control, the broader areas of peacekeeping and conflict resolution, stabilisation and reconstruction, weapons non-proliferation (both nuclear and conventional) and disarmament (including land mines and cluster munitions), plus management of export controls on some restricted or prohibited products and materials.
The heading also includes work aimed at building dialogue against extremism, particularly in the Asia-Pacific region. This includes support for the Alliance of Civilisations and Inter-faith Dialogue processes, as well as academic exchanges and media visits to and from New Zealand.
MFAT and security
New Zealand has major and growing security responsibilities that place major demands on MFAT in Wellington and at posts.
It must participate in political and diplomatic efforts at the UN, in regional forums and in dialogue with individual countries to promote peaceful conflict resolution and stabilisation.
It is a member of the Operational Experts Group of the Proliferation Security Initiative, which promotes international cooperation to stop the illegal movement of weapons of mass destruction.
New Zealand took a leading role in efforts to outlaw landmines and is currently one of the countries leading the effort to bring about the same result with cluster munitions.
MFAT is involved in counter-terrorism work multilaterally and regionally. It administers a Pacific Security Fund, which allows New Zealand law enforcement and border control agencies to provide training and other support to Pacific Island countries. It convenes the Pacific Forum Working Group on Counter-Terrorism, which assists with counter-terrorism capacity building in the Pacific.
There is also an Asia Security Fund, which supports counter-terrorism capacity building and regional security initiatives in South East Asia.
MFAT is an active player in efforts to prevent radicalisation in our region and further afield, including through initiatives such as the Alliance of Civilisations and the Inter-faith Dialogue.
New Zealand is known internationally for the peacekeeping and peacebuilding work it has done and is doing, especially in the Pacific and the Middle East. This work involves considerable input not only by the military, but also by MFAT, which is closely involved with both planning and operational management.
MFAT plays a significant role in security work within the Pacific region. It is a major participant in the Regional Assistance Mission in Solomon Islands (RAMSI) and has been involved in post-conflict situations or restoring stability in Bougainville and Tonga.
MFAT also supports New Zealand’s extensive Middle East deployments, especially in Afghanistan and Egypt.
Planned changes
Initiatives being prepared by MFAT to strengthen New Zealand’s security capacity in the next two years include:
Context
Environmental and resource diplomacy was once a small area of work for foreign ministries that was carried out almost entirely in the multilateral (UN) arena. However, with increasing environmental awareness and in particular with the growth of global concern over climate change, it has become more wide-reaching.
Increased efforts are being made not only multilaterally, but also regionally and bilaterally.
Resource diplomacy is increasingly tied to trade negotiation and security efforts.
MFAT and resources
The Ministry needs increased capacity to handle resource-related work in the following fast-growing areas:
Planned changes
Initiatives being prepared by MFAT to strengthen New Zealand’s capacity to manage resource negotiations and processes in the next two years include:
Context
There is a legitimately high level of expectation by New Zealanders that MFAT will be able to help them when they run into trouble while living or travelling overseas.
In 2006/07 MFAT helped more than 1300 New Zealanders overseas and their families following incidents ranging from lost passports to arrests, serious injury accidents and deaths.
MFAT and crisis response
New Zealand ’s overseas diplomatic posts are able to provide help (technically known as consular assistance) to New Zealanders in distress, though the help that may be able to be provided depends on the size and location of the particular post, and the type of help sought.
As people travel in ever larger numbers, and in an environment of high public concern about terrorism and other threats to travellers, so pressure is growing on MFAT to provide increasing amounts of high-quality assistance to travellers and New Zealanders resident overseas.
There is a growing demand for accurate, sophisticated and frequently updated travel advisories.
The Ministry has to maintain the capability to provide a credible response to major international crises (for instance, the December 2004 Asian tsunami) that may involve New Zealanders.
It must also be able to respond to incidents – for instance, pandemics – that could affect New Zealanders in more than one place overseas.
Planned changes
Initiatives being prepared by MFAT to strengthen New Zealand’s crisis response capacity in the next two years include:
