The EU remains central to New Zealand’s destiny


Pundit: 23 December, 2014.


Keywords: Globalisation & Trade; Political Economy & History;


Suppose Britain exited the European Union of 28 countries. I am not recommending it; they would probably be worse off economically. Nor am I predicting it, although sometimes politics produces odd outcomes. Rather suppose ‘Brexit’ in order to explore the implications for New Zealand.


What would New Zealand do? We could say ‘a plague on all your houses’ but we are not an isolationist nation, nor can we afford to be. We could not go solely with an isolated Britain which would be a third rate world power both economically and politically, not least because some of its business would cross the Channel in order to remain inside the EU.


Of course we would retain ties of sentiment, ancestral and cultural heritage with Britain and a good number of us have friends and relatives there (although an increasing number have similar connections to other European countries including Ireland). New Zealand would try to straddle both, but if it had to make a choice it would go with the EU.


We’d have to. Without Britain, the EU would still be the second to biggest economy in the world and an increasingly important player in world politics. Its 2009 Treaty of Lisbon – treaties are the way that the member states set out the framework for the EU’s evolution – established a unified foreign service. Although most of its member states have a military capacity the EU has none, instead wielding soft power. That includes coordinating its member’s forces in the counter-piracy taskforce off the Somali coast. New Zealand is a part of that too so we have to interact with them (and a number of other patrolling countries).


Indicative of its ambition for a global reach, the EU is the second largest donor to the Pacific Islands (behind Australia). We collaborate with them, combining their muscle with our local knowledge.


The EU is critical in New Zealand external economic relations. I’ll avoid listing the eye-glazing statistics; the fact is that the EU is the second or third largest destination for our exports and a major source of investment. Regrettably we often separate the data into individual member states, thereby underplaying the EU’s single market. It would be as logical to categorise our exports to Australia by its six states. But no longer is Britain our dominant destination within the EU, although it can be hard to tell. A container of apples shipped to England may be transhipped to consumers on the continent.


The irony of all this is that when Britain joined the then EEC forty years ago, most New Zealanders objected. Ties to Britain were closer and in any case our dairy products and meat were being excluded. (It is unlikely that under Brexit Britain would reintroduce the access we had in 1973.) There was a sophisticated view that Britain should join in its best interests but that did not justify screwing New Zealand. It was especially held by those who did the superb job of negotiating a far better deal for primary product access than Australia got.


Four decades later, they have been proved right. It is the whole of the EU which is now important to us, and not just Britain. Not just economically either. New Zealand and the EU have just announced a deepening ‘across all aspects of [the] relationship including in the political and security sphere, science and innovation, and trade and investment.’


It is hoped that negotiations will begin next year including a free trade agreement which will have the advantage of lessening our economic dependence on China. Good relations with the EU also means we need not be so dependent upon the US. One shudders to think how we could respond if the US and China got into conflict. A balanced New Zealand foreign policy has a central role for the EU, with or without Britain.



(This article was made possible by support from the EU Delegation in Wellington and travel assistance from Air New Zealand. An earlier version of this article was published in ‘The Dominion Post’.)