Foreign Affairs

Peters pushes trade, pokes China in latest US trip

Winston Peters’ second high-profile US speech in less than a year seems to have created less of a stir than the first - but his exhortations for a free trade deal and veiled digs at China offered more than enough of interest, as Sam Sachdeva reports.

When it comes to Winston Peters, the content of his foreign policy speeches is most often far less interesting than the verbal jabs he offers after them.

This term, the Foreign Affairs Minister has largely stuck to his ministry’s talking points in the remarks they help prepare - but it was one apparent exception that led to heightened scrutiny of his latest address.

Peters’ speech to the Center for Strategic and International Studies (CSIS) in Washington this week followed a Georgetown address last December that created a stir, with Peters “unashamedly ask[ing] the United States to engage more” in the Pacific in what some viewed as a provocation towards China.

It later emerged that the speech had not been viewed by Prime Minister Jacinda Ardern before delivery, with Politik reporting that officials from the Ministry of Foreign Affairs and Trade (MFAT) had taken a heavier role with the speech notes before his current trip.

That might explain why, as one observer told Newsroom, the CSIS speech sounded far more like a traditional MFAT effort.

With a heavy emphasis on the need for a bilateral free trade agreement between the United States and New Zealand - a pet project of Peters, who has claimed the backing of US Vice President Mike Pence - the Foreign Affairs Minister described its absence as “one glaring gap...in an otherwise exemplary relationship”.

Multilateralism 'platform' for US prosperity

Peters spoke about “real concerns” for American prosperity if it did not engage in trade talks more frequently, pointing to dropping numbers for the US share of imports across Asia.

Surprisingly, the man who voted against an FTA with China while Helen Clark’s foreign minister highlighted the economic boon provided by the deal as an example of what the US could achieve - as well as a pointed hint that American administrations had to offer those in the Asia-Pacific region economic as well as military partnerships if it did not want China to extend its resources.

There was also praise for multilateral deals like the CPTPP, which US President Donald Trump pulled his country out of when it was in an earlier form. Peters said the final version provided “a ready‑made platform to reverse the declining share of US exports to the Asia‑Pacific region”.

But in the question and answer session which followed, there was a clear recognition of Trump’s one-on-one approach to trade talks, Peters saying New Zealand had to “face reality” despite its preferences.

Another difficult reality the country must face was articulated by Deborah Elms from the Asian Trade Centre, who asked about the plausibility of reaching a deal with real value in a meaningful amount of time.

“I understand why you want a bilateral FTA from the 30,000-foot level, that makes sense, but as soon as you get down into the practical nature of what that agreement contains, it seems to me you run into a tonne of problems - dairy, agriculture, getting it through Congress etc,” Elms said.

“All of the obstructions and difficulties you might talk about are there in every trade negotiation all over the world...if you took that attitude you wouldn’t have a trade deal with anybody, because there’s always going to be some conflicts unless your economies are totally different.”

“How long do you think this will take to conclude, to negotiate, to actually see the light of day?”

New Zealand’s focus, replied Peters, was simply on getting talks started, in the hopes that opening a crack in the door would eventually lead to the country walking through.

“All of the obstructions and difficulties you might talk about are there in every trade negotiation all over the world...if you took that attitude you wouldn’t have a trade deal with anybody, because there’s always going to be some conflicts unless your economies are totally different.”

He outlined some “plain facts”: of the 20 countries with which the US had signed a free trade deal, 13 had economies smaller than New Zealand - in turn, one of only nine democracies with an unbroken history of democracy since 1854.

“I think good nations should be rewarded and bad nations be punished, not the reverse as what I’m saying, some of the bad ones are getting all the rewards and the good ones are being ignored.

“You wouldn’t do it as a mother and father, you shouldn't do it as an international partner either.”

Donald Trump and his administration has spoken about a "free and open Indo-Pacific" - and New Zealand has moved closer to US language on the matter. Photo: Getty Images.

Notably, Peters referred to the “Indo-Pacific” at several points during his speech despite having previously shunned the US-backed term in favour of the Asia-Pacific, which he said “resonates with New Zealanders because of our own geography”.

That is no coincidence, but part of a deliberate and formal MFAT policy shift, as Newsroom can reveal.

An MFAT briefing to Peters earlier in the year, recently obtained under the Official Information Act, said both he and Prime Minister Jacinda Ardern had “expressed New Zealand’s comfort” with the Indo-Pacific terminology after a debate over the concept in 2018.

Citing the need for a clearer articulation of New Zealand’s position on the Indo-Pacific, as well as when and where the country would use the term, MFAT proposed what it called a “context-specific” approach.

Indo-Pacific would be used for both ASEAN-centred forums and any groupings which included India; Asia-Pacific would be the term of choice for APEC summits and other meetings without India; and the Pacific would (unsurprisingly) take pride of place both when in the Pacific and on issues relating to the region.

That our foreign affairs ministry felt the need to issue a formal communique on an issue of semantics hints at the delicate positioning that New Zealand requires in the current geopolitical climate.

Rules of engagement with China

Of course, Peters is rarely one for subtleties, and when asked about New Zealand’s relationship with China in the Asia-Pacific he made it clear where the fault lines lie.

“We seek to have free and open trade arrangements with them, we seek to have engagement with them in the Pacific, but when we say that we do specify the kind of rules that underpin our engagement.

“Our engagement when we’re involved in the Pacific focuses on and prioritises the interests of the local people, not New Zealand, so much so to the extent that we don’t demand that any contract arising from our aid programme should be first of all granted to a New Zealand company of interest.”

Given Peters raised concerns while in opposition about an influx of Chinese workers into New Zealand and other countries as part of China’s Belt and Road Initiative, it was not a difficult contrast to draw.

While he acknowledged “a certain economic nationalism I can understand” from countries that placed conditions on aid, Peters said the Government had made its priorities clear to China in discussions for joint contracts - but conceded that had “not always...been successful”.

That was most likely a reference (at least in part) to the Te Mato Vai project in the Cook Islands, a trilateral initiative with China and New Zealand which Peters has previously described as “a rather bad example” of collaboration.

"If the question becomes then why would we bother to [invest in the Pacific], well the answer is have a good hard look at who’s going to step in unless you do - who will fill the void and fill the vacuum?”

But Peters was also blunt on the shortcomings of the United States and other nations, reflecting on the Government’s decision to launch its Pacific Reset shortly after coming into power.

“One of the parts of that admission or reflection on what had happened in the Pacific was we ourselves, dare I say it, alongside Australia and the US and others, had taken our eyes off the area of our nearest neighbourhood, namely the Pacific, and that there are consequences for that.”

He spoke about the infrastructural deficit that had built up over the years and was hindering the ability of Pacific nations to move into developed-nation status.

“If we’re going to take countries from where they were to where we want them to be in the future, we’re going to have to make some fundamental investments, and if the question becomes then why would we bother to do that, well the answer is have a good hard look at who’s going to step in unless you do - who will fill the void and fill the vacuum?”

Despite the Pacific’s status as the largest economic and military theatre in the world, Peters said it was still an afterthought for most American officials and politicians, simply an add-on to Asia.

“It is massive, it is huge, and although it’s not heavily populated, strategically it is as critically important as any other part of the world.”

Getting the US to better understand and act on that - and to put its money where its mouth is on trade with the wider Asia-Pacific - now looms as Peters’ major test.