New Zealand: Background and Bilateral Relations with the United States

New Zealand: Background and Bilateral
Relations with the United States
Updated September 3, 2008
Bruce Vaughn
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade

New Zealand: Background and Bilateral Relations with
the United States
Summary
New Zealand and the United States have close ties that are based on shared
cultural traditions and values as well as shared interests. New Zealand is a regular
contributor to international peace and stability operations and has contributed troops
to the struggle against militant Islamists in Afghanistan and assisted with
reconstruction efforts in Iraq. Relations between the United States and New Zealand
have improved in recent years as past differences over nuclear policy have faded in
importance. Areas of commonality, rather than areas of difference, have once again
come to define the bilateral relationship.
Under the leadership of Prime Minister Helen Clark, New Zealand continues to
seek closer economic relations with the United States through a free trade agreement
(FTA). While the overall volume of trade with New Zealand is relatively small,
progress on an FTA is viewed as politically significant by some given New Zealand’s
status as a democratic nation that has fought alongside the United States in many of
its conflicts.
New Zealand plays an important role in promoting regional stability in the
Southwest Pacific and in archipelagic Southeast Asia. It has been diplomatically
engaged and has committed troops and police to promote peace and stability in places
such as the Solomon Islands, Bougainville in Papua New Guinea, and East Timor.
There may be further need for New Zealand’s assistance to help promote democracy
and the rule of law in regional states given ongoing unrest in places like East Timor
and the Solomon Islands.
Prime Minister Clark has sought to make New Zealand a leader on the issue of
climate change and make it the world’s first truly sustainable and carbon-neutral
country. It is thought that New Zealand would, along with Australia, accept climate
refugees from places such as Tuvalu should global warming lead to rising sea levels
that would inundate South Pacific island nations.
New elections in New Zealand are to be called by November 15, 2008. Prime
Minister Clark was trailing her opponent John Key of the National Party in August

2008 but had narrowed the National Party’s lead.

Contents
Recent Events.....................................................1
Elections ....................................................1
Leadership on Climate Change ...................................1
Background ......................................................3
Domestic Political Context......................................3
Structure of Government....................................3
Political Parties...........................................4
Economics and Trade...............................................5
Regional Economic Ties........................................5
P4 ......................................................5
Contributions to Peace and Stability Operations..........................6
Afghanistan ..................................................6
Iraq and Counterterrorism.......................................7
Defense Expenditures..........................................7
Bilateral Relations with the United States...............................8
Free Trade Agreement.........................................10
Institutional Support...........................................11
Policy Options...............................................12
Other External Relations...........................................13
Australia ....................................................13
The United Kingdom..........................................13
Regional Role in the Pacific ....................................13
Chronology ......................................................16
List of Figures
Figure 1. Map of New Zealand......................................15
List of Tables
Table 1. New Zealand Political Parties and Their Electoral
Performance in 2005...........................................4

New Zealand: Background and Bilateral
Relations with the United States
Recent Events
Elections
Prime Minister Helen Clark was first elected Prime Minister as the leader of the
Labour Party in 1999, was returned in 2002, and won more narrowly against a
resurgent National Party in 2005. New elections are to be called by November 15,
2008. Clark has been trailing her opponent John Key of the National Party. In an
August 2008 poll, Labour had narrowed its margin but still fell 11 points behind the
National Party with 37% favoring the Labour Party and 48% favoring the National
Party.¹
Leadership on Climate Change
Prime Minister Clark continues to push New Zealand to become a carbon-
neutral nation and has set an example for the world on climate change.² In August
2008, the Clark government appeared to have the votes necessary to pass legislation
to enact the government’s emissions trading scheme which is designed to help New
Zealand achieve its Kyoto Protocol targets.
Clark used the Prime Minister’s Statement to Parliament on March 13, 2007, to
declare her government’s intention to make New Zealand the world’s first truly
sustainable and carbon-neutral country, adding that “the pride we take in our quest
for sustainability and carbon neutrality will define our nation.” Clark stated that,
“traditional patterns of development and fast growing populations have put an
intolerable strain on the planet. The future economic costs of doing nothing are
dire.”³ Clark pointed to renewable energy as a key component along with the
importance of forestry to climate change mitigation as key to lowering New
Zealand’s carbon footprint. Climate Change Minister David Parker has identified
deforestation as a key challenge for New Zealand and the world. Deforestation is
thought to account for some 20% of global carbon dioxide emissions at present. The
Clark government is contemplating a framework where those responsible for the

¹ Paula Oliver, “Labour Narrows Poll Gap with National,” New Zealand Herald, August 25,

2008.

² “New Zealand Should Aim to be World’s First Carbon Neutral Country, Leader Says,”
International Herald Tribune, February 13, 2007. See also Rt. Hon. Helen Clark, “Prime
Minister’s Statement to Parliament,” February 13, 2007.
³ Rt. Hon. Helen Clark, “Prime Minister’s Statement to Parliament,” February 13, 2007,
[http://www.beehive.govt .nz].

emissions will bear some of the costs of their actions.⁴ In 2007, New Zealand was
ranked first in the Environmental Performance Index produced by Yale University.⁵
New Zealand’s energy resources make it relatively easier for it to attain green targets
than other countries more dependant on coal. Hydroelectric power accounts for
64.6% of total electricity output with natural gas and coal accounting for 16.7% and
9.9% respectively.⁶ New Zealand has undertaken a commitment to have 90% of its
energy drawn from renewable sources by 2025.⁷
The New Zealand government is keen to brand New Zealand as a “green
producer” as it has already encountered difficulty with food exports over the “food
miles” issue in Great Britain.⁸ New Zealand has made its case that though energy is
expended in transporting New Zealand food to distant markets, its meat and dairy is
free-range and grass fed, and hence relatively carbon-emissions friendly when
compared with Concentrated Animal Feeding Operations (CAFO), which feed energy
intensive grain, that are more common in the United States and Europe.⁹ Two studies
from Lincoln University in Christchurch have found that there is greater energy
efficiency in New Zealand for the production of lamb, apples, and dairy products
when compared with British products.¹⁰ These studies took into account
transportation costs from New Zealand to the United Kingdom as well as other
aspects of production.

⁴ “Deforestation Scrutinized,” Bay of Plenty Times, March 14, 2007.
⁵ “New Zealand Tops World Environmental Rankings,” NZUS Council, February 26, 2007.
⁶ “New Zealand Economic Affairs,” Europa World, [http://www.europaworld.com]
⁷ Washington International Renewable Energy Conference Proceedings, March 4-6, 2008
Washington, DC, Pembina Institute.
⁸ The food miles concept refers to the energy, and hence carbon emissions, that is expended
to transport food.
⁹ Angela Gregory, “PM Warns on ‘Dirty’ Dangers,”
¹⁰ “New Food Miles Report Shows NZ Dairying Still More Efficient Than UK, Greenhouse
Gasses Included,” Lincoln University, Christchurch, New Zealand, July 27, 2007.

Background
New Zealand’s population of just
over four million has many sharedNew Zealand in Brief
values with the United States that stem^Area:^{270,5000 s}^q^{. k}^m^{or abou}^t^t^h^e^si^{ze of}
from common historical roots as part^Co^lo^r^a^d^o
of the British empire. New Zealand,^Ca^pita^l:^W^e^llin^g^t^oⁿ
also known as Aotearoa or “the land of^P^o^pula^t^io^n:⁴^.²^m^illioⁿ
the long white cloud,” was settled by^Pop^u^l^ati^oⁿ^grow^th^rate^:^0.7%^Et^{hnic G}^r^o^ups:^Eu^ropean^64.8%^{, Maori}^14%^,
the Polynesian-Maori people by the^A^sⁱ^aⁿ^8.8%^{, Pol}^yⁿ^e^sⁱ^an^6.6%
Tenth Century. Dutch navigator Abel^Lⁱ^ves^t^ock^:⁹^.⁸^m^{ill cattle an}^d³⁹^.²^m^{ill sh}^eep
Tasman discovered the western coast of^Religⁱ^oⁿ^:^Aⁿ^g^lican¹⁵^%^{, Ro}^m^aⁿ^Cath^o^{lic 1}³^%^,
New Zealand in 1642 but it was^Pres^by^t^e^ri^an^11%^{Per Capita G}^D^P:^{$26,000 ppp}
English Captain James Cook who, over^M^a^{jor M}^a^rk^ets^:^A^u^s^t^{ralia, U.S., J}^a^pan^,^C^hⁱⁿ^a,
three expeditions in 1769, 1773, and^&^Uⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^.

1777, circumnavigated and mapped the^Unem^ploym^ent:^3.8%

islands. Cook reported on the Maori as^Lⁱ^{fe ex}^pectancy:^{78.81 y}^ears
well as New Zealand’s unique flora and^G^overnm^e^nt:^Mi^x^e^d-m^e^m^b^{er proport}ⁱ^oⁿ^a^l^dem^o^cracy^{, 120 s}^eat^uⁿⁱ^cam^eral^parlⁱ^a^m^eⁿ^t
fauna. The 1840 Treaty of Waitangi,^C^hⁱ^e^{f of S}^t^ate:^Q^u^e^eⁿ^E^lizabet^h^I^I^w^h^oⁱ^s
between the British Crown and Maori^repres^en^{ted in}^New^Z^ealan^{d by}^t^h^{e Gov}^e^rn^or
Chiefs, serves as the basis for defining^Gen^e^r^a^{l Silv}^{ia Car}^t^w^r^ig^h^t
relations between the Maori and
Pakeha (European) communities. ^Sources^:^Ecoⁿ^o^m^{ist I}ⁿ^tellig^en^{ce Un}^{it, State}^D^e^p^a^r^t^m^eⁿ^t^,^C^I^A^W^o^r^l^{d F}^act^book^an^d
^go^ve^rⁿ^m^e^nt^o^f^N^e^w^Ze^a^l^aⁿ^d^st^a^tⁱ^s^tⁱ^c^s

New Zealanders are over 80%¹¹
urban and have a 99% literacy rate.
New Zealand has a land area of
103,733 square miles, which is about
the size of Colorado. It is 28% forested, 50% in pasture, and 9% under cultivation.
New Zealand’s principal exports are agriculturally based though services, notably
tourism, plays an increasingly important role.
Domestic Political Context
Structure of Government. The British Monarch, Queen Elizabeth II,
remains the constitutional head of state. Her representative, the Governor General,
acts on the advice of the Prime Minister’s Cabinet. New Zealand attained Dominion
Status in 1907 and gained full political independence from Britain under the Statute
of Westminster Adoption Act of 1947. In 1893, New Zealand gave women the right
to vote. This made New Zealand the first country to do so.¹² Today, New Zealand is
a unicameral, mixed-member-proportional (MMP), parliamentary democracy. MMP
was introduced in New Zealand in 1996. There are 121 seats in parliament of which
¹¹ Paolo Pasicolan, ed., U.S. and Asia Statistical Handbook, (Washington: The Heritage
Foundation, 2003).
¹² A. E. McQueen, “New Zealand: Physical and Social Geography,” in The Far East and
Australasia, (Surrey: Europa Publications, 2002), p.889.

69 are electorate member seats including seven seats reserved for Maori candidates.

Fifty-two seats are selected from party lists.
Political Parties. The center-left Labour Party of Prime Minister Clark and
the opposition center-right National Party led by John Key are the two main political
parties in New Zealand. New Zealand’s mixed member proportional system gives
smaller parties a key role in forming coalition government. The other key parties, and
their performance in the 2005 election, are listed in the chart below.
In August 2008, National Party Leader John Key stated that he would not have
New Zealand First Party leader and Foreign Minister Winston Peters as a minister in
his government should he be elected. Key made this statement in response to
allegations that Winston Peters received a $100,000 donation for legal fees from a
wealthy individual. As a result, if the National Party needs a coalition partner to¹³
govern it will likely be a party other than the New Zealand First Party. New Zealand
First was formed in 1993 to “represent the views of all New Zealanders concerned
about the economic and social direction of New Zealand, the sale of public assets to
foreign control, and the decline in employment and social services.”¹⁴
Table 1. New Zealand Political Parties and Their Electoral
Performance in 2005
PartyPercentage of voteSeats in Parliament
NZ Labour Party41.1%50
National Party39.1%48
NZ First Party5.7%7
Green Party5.3%6
Maori2.1%4
United Future2.7%3
ACT NZ1.5%2
Progressive Party1.2%1
Other1.3%121
^Source:^“^N^ew^Z^ealan^d,”^C^I^{A W}^o^r^l^{d Fact}^book^,^A^ugust²¹^,^{2008, [h}^ttp://^www.^cⁱ^a^.^g^o^v^]^.

¹³ Audrey Young, “Nats Divorce Peters,” New Zealand Herald, August 28, 2008.
¹⁴ New Zealand First, “Introduction to New Zealand First Policies,” [http://www.nzfirst.org].

Economics and Trade
New Zealand is a trade dependant nation. New Zealand’s principal exports are
dairy products, meat, timber, fish, fruit, wool, and manufactured products. While
agriculture contributes to only 6.2% of GDP, agriculture accounts for a significant
percentage of export earnings. Data indicates that 41.3% of New Zealand’s export
earnings are derived from a combination of dairy (18.1%), meat (13.5%), forestry¹⁵
(6.2%), and fisheries (3.5%). New Zealand experienced 3.5% GDP growth in 2007.
Regional Economic Ties
New Zealand has signed Free Trade Agreements (FTA) with Australia,
Singapore, Brunei, Chile, Thailand, the Association of Southeast Asian Nations
(ASEAN) and China. New Zealand trade with ASEAN has increased by
approximately 17% per year in recent years.¹⁶ New Zealand is also reportedly
pursuing FTAs with India, Japan, Korea, and Persian Gulf states.¹⁷ This free trade
orientation is likely to continue if the National Party wins the next election.
There is a view that growing trade protectionism in the United States will do
little to help the United States be part of the emerging trend towards new regional
economic integration in Asia. This, some worry, could place China, and not the
United States, at the center of future economic and strategic architectures in Asia.¹⁸
New Zealand, which has been seeking an FTA with the United States, signed an FTA
with China that comes into force in October 2008. With this agreement in April

2008, New Zealand became the first developed country to sign an FTA with China.

Under the agreement, tariffs on 96% of New Zealand exports will be phased out by
2017. China is New Zealand’s fourth largest trading partner and its fastest growing
export market.¹⁹
P4. New Zealand is a member of the Trans-Pacific Strategic Economic
Partnership Agreement, or P4, along with Singapore, Chile, and Brunei. The P4 came
into force in 2006 with negotiations on investment and financial services to follow.²⁰
This free trade agreement has attracted interest in the United States. Some view it as
offering a key opportunity providing a building block approach towards wider Asia-
Pacific regional trade liberalization and integration. The P4 has “progressive

¹⁵ Data drawn from 2006. “New Zealand Economic Affairs,” Europa World,
[ h t t p : / / www.e u r opa wor l d.c om] .
¹⁶ Hon. Phil Geoff, Minister of Trade, “Development on Free Trade Negotiations, New
Zealand Government, July 15, 2008.
¹⁷ “Dairying Key to Free Trade Deals,” NZ Dairy Exporter, July 1, 2008.
¹⁸ P. Parameswaran, “Protectionist US Risks Losing Economic Leadership in Asia,” Agence
France Presse, July 7, 2008.
¹⁹ “China FTA Kicks In,” Rural News, August 13, 2008.
²⁰ “P4 Grouping Targets US as Fifth Member,” National Business Review, June 27, 2008.

provisions on Labour and Environment.”²¹ The United States’ decision to begin
discussions with the P4 group on a financial services agreement is viewed by some
as an indication that the United States is interested in the P4 in general and with free
trade talks with New Zealand.²²
Contributions to Peace and Stability Operations
New Zealand is an active supporter of international security and peacekeeping
efforts in the Pacific and elsewhere. New Zealand’s commitment to such operations
is demonstrated by its leading role in helping to resolve the conflict on Bougainville,
Papua New Guinea its participation in peace operations in East Timor and through
its contribution of troops to security operations in the Solomon Islands. Prime
Minister Clark committed New Zealand military personnel, as well as police and
civilian assistance, to the Regional Assistance Mission in the Solomon Islands in the
summer of 2003. New Zealand forces joined forces from Australia, Fiji, Tonga, and
Papua New Guinea in an effort to bring peace and stability to the Solomon Islands.²³
New Zealand has also contributed to peace operations in Bosnia, Sierra Leone, and
Kosovo.
Afghanistan
New Zealand has supported the international effort in the struggle against
militant Islamists and has sent peacekeeping and reconstruction forces on extended
deployment to Afghanistan.²⁴ New Zealand has established a joint civilian-military
Provincial Reconstruction Team (PRT) to provide stability in Afghanistan.²⁵ New
Zealand assumed leadership of the PRT for Bamian Province in September 2003.²⁶
New Zealand has also contributed some limited support to the training of the Afghan
Army and police, and the International Security Force. New Zealand has made a
commitment to provide long term reconstruction and development assistance to
Afghanistan. New Zealand’s approach is based on integrating security and
humanitarian intervention.²⁷ First Lady Laura Bush’s visit to the New Zealand PRT
in June 2008 is an indication of the increasingly close relationship between the U.S.

²¹ Hon. Phil Geoff, Minister of Trade, “Evolving Asia-Pacific Regionalism,”Government
of New Zealand, June 10, 2008.
²² “New Zealand: Country Forecast Summary,” Economist Intelligence Unit, June 2, 2008.
²³ Rt. Hon. Helen Clark, “Infantry Company Deployment to Solomons,” August 25, 2003,
[http://www.beehive.govt .nz].
²⁴ Rt. Hon. Helen Clark, “Government Assistance to Operation Enduring Freedom and Iraq,”
June 9, 2003, [http://www.beehive.govt.nz].
²⁵ Stephen Graham, “U.S. Military Changes Tactics,” Charleston Gazette, December 21,

2003.

²⁶ Rt. Hon. Helen Clark, “NZDF to Lead Afghan Provincial Reconstruction Team,”
September 22, 2003, [http://www.beehive.govt.nz].
²⁷ “New Zealand Minister Restates Commitment to Afghanistan,” BBC News, April 7, 2005.

and New Zealand. Shortly after her visit, she stated that their work “shows the power
of international collaboration in securing Afghanistan’s progress.”²⁸
Iraq and Counterterrorism
New Zealand also sent a small contingent of combat engineers to assist with
reconstruction efforts in post-conflict Iraq. They completed their mission in October
2004.²⁹ This deployment earned New Zealand the designation “force contributing
nation” by the United States.³⁰
New Zealand is in the process of expanding its counterterrorist capabilities.
Current counterterrorist capabilities are provided by the 1^st New Zealand Special Air
Service (SAS) Group and the Police Special Tactics Group. New Zealand is
reportedly forming a third counterterror unit which is to be called the Counter
Terrorist Tactical Assault Group.³¹ New Zealand’s contribution to the struggle
against militant Islamists was demonstrated in December 2003 when a New Zealand
P-3 K Orion aircraft spotted two ships in the Northern Arabian Sea which were found
to be smuggling $11 million worth of heroin and methamphetamines for Al Qaeda.³²
New Zealand deployed the ANZAC Frigate HMNZS Te Mana to the Persian Gulf in
April 2008 to help provide maritime security in the region.³³ New Zealand is a party
to all 12 United Nations conventions on terrorism. Prime Minister Clark also
provided some support to the United States initiative to focus the Asia Pacific
Economic Cooperation (APEC) group on security issues at its 2003 meeting.³⁴
Defense Expenditures
New Zealand embarked on a major increase in defense expenditure in the spring
of 2005. New Zealand announced plans in May 2005 to increase annual defense
expenditures by 27% over the next decade. The increase in funding is to expand the
number of defense personnel and upgrade equipment, including new armored
personnel carriers, navy ships, and helicopters. It will also refurbish planes for the air
force, develop base infrastructure, increase stocks of spares, and enhance training and

²⁸ “First Lady Speaks at International Conference in Support of Afghanistan,” US Fed News,
June 12, 2008.
²⁹ Hon. Mark Burton, “New Zealand Defence: Playing Our Part as a Responsible World
Citizen,” December 11, 2004, [http://www.beehive.govt.nz].
³⁰ Tracy Watkins, “N.Z.’s Role in Iraq Praised by Downer,” Dominion Post, December 15,

2003.

³¹ Andrew McAlley, “Army Recruits Soldiers for New Secret Service,” Waikato Times,
March 19, 2005.
³² Mathew Dearnaley, “Orion Patrol Fingers Dhows Linked to al Qaeda,” New Zealand
Herald, December 22, 2003.
³³ “Navy Ready for Persian Gulf Deployment,” Scoop NZ, April 2, 2008.
³⁴ “New Zealand in the News,” United States-New Zealand Council, December 2003.

retention.³⁵ The announced $NZ 4.6 billion increase³⁶ will provide New Zealand with
a greater capability to meet its security needs including a secure New Zealand,
including its territorial waters and exclusive economic zone, a strong strategic
relationship with Australia, a stable South Pacific, and an expanding dialogue with
Southeast and Northeast Asia. It will also support New Zealand’s global approach to
collective security including participation in peace operations.³⁷ In early 2008, the
National Party did not identify any great differences in approach to defense and
agreed with Labour that personnel issues are a leading concern.³⁸
Bilateral Relations with the United States
One of the key achievements of Clark’s administration has been the
strengthening of bilateral relations with the United States. Clark has emphasized the
“strong and mature friendship built on common values and a long history of working
together” and the need to emphasize the “breadth and depth of the relationship.”³⁹
In this way, she broadened bilateral cooperation and to moved relations forward to
a new degree of closeness where past differences no longer define the relationship.
The United States suspended its formal security commitment to New Zealand in the
mid-1980s due to differences over nuclear policy. This increased closeness in the
relationship sets the stage for future bilateral cooperation as both countries head to
the polls in the fall of 2008.
United States State Department Spokesman Phil Reeker has emphasized the
“shared values” and “long history” that the United States and New Zealand have in
common.⁴⁰ In Congressional testimony on March 15, 2007, Deputy Assistant
Secretary of State, Bureau of East Asian and Pacific Affairs, Glyn Davies, described
New Zealand as a “key partner ... which remains an important and close friend of the
United States. Our countries share many of the same values and interests around the
globe.” He added that “clearly, New Zealand is dedicated to promoting peace and
stability where it can ... as a key partner, we coordinate closely with New Zealand on
the Pacific.”⁴¹

³⁵ “New Zealand to Hike Military Spending by 27% Over 10 Years,” Associated Press, May

2, 2005.

³⁶ One U.S. dollar purchased approximately one dollar and fifty cents in New Zealand
dollars in September 2008.
³⁷ Government of New Zealand, The Defence Sustainability Initiative: Building a Long-term
Future for the New Zealand Defence Force, May 2, 2005.
³⁸ Nick Lee-Frampton, “New Zealand’s Defense in Transition,” Defense News, February 18

2008.

³⁹ “Prime Minister to Visit United States,” [http://www.beehive.govt.nz].
⁴⁰ Fran O’Sullivan, “U.S. Spokesman Keen to Reinforce Long Friendship,” New Zealand
Herald, November 19, 2003.
⁴¹ Deputy Assistant Secretary of State, Bureau of East Asian and Pacific Affairs, Glyn
Davies, Statement before the House Subcommittee on Asia, the Pacific, and the Global
Environment, House Committee on Foreign Affairs, March 15, 2007.

New Zealand has, along with Ireland, Austria and others, worked within the 45-
nation Nuclear Suppliers Group in expressing concern with the proposal to exempt
India from restrictions on nuclear trade as part of the U.S.-India civil nuclear
agreement.⁴² The exemption would allow any NSG member country to supply India
with nuclear materials and technology for its civil nuclear program despite the fact
that India is not a signatory to the Nuclear Non-Proliferation Treaty (NPT). New
Zealand Foreign Minister Phil Geoff stated “Discussions in Vienna have focused on
how to ensure compatibility of these objectives [of the NSG] with the exemptions,
sought for the US-India Civil Nuclear Co-operation Agreement.”⁴³ It was reported
that New Zealand worked with like-minded nations on proposed conditions for
India’s exemption.⁴⁴
U.S. Ambassador William McCormick in 2007 described the bilateral
relationship with New Zealand as an “already strong relationship” that has “stepped
up a gear to become even stronger.”⁴⁵ The United States and New Zealand have a
broad array of contacts and a history of working and fighting together. New Zealand
has fought alongside the United States in most U.S. key conflicts including WWI,
WWII, Korea, and Vietnam. From the early 1950s to the mid-1980s this cooperation
was conducted under the Australia-New Zealand-United States (ANZUS) alliance.
In her remarks with Prime Minister Helen Clark during a visit to New Zealand
in July 2008 Secretary of State Condoleezza Rice described New Zealand as a “friend
and an ally” and pointed out that the relationship had “moved beyond a whole host
of problems.” She added that the relationship was now structured for cooperation to
“meet the post September 11^th challenges” and stated that New Zealand is one of the
“strongest and most active members” in its participation in the Proliferation Security
Initiative (PSI). At that time she also pointed to New Zealand’s contribution in
promoting adherence to International Atomic Energy Association (IAEA) and the
United Nations Security Council, the South Pacific, counterterrorism cooperation,
maritime security, disaster relief, and support in Afghanistan.⁴⁶ New Zealand’s
participation in PSI has also led to increased participation in military exercises with
the United States.⁴⁷
Increasing waivers of restrictions on exercises involving U.S. and New Zealand
troops also indicate a desire to move beyond past restrictions on military-to-military

⁴² Glenn Kessler, “In Secret Letter, Tough U.S. Line on India Nuclear Deal,” The
Washington Post, September 3, 2008.
⁴³ Minister for Foreign Affairs, Phil Geoff, Media Statement, “US-India Civil Nuclear
Agreement,” August 26, 2008.
⁴⁴ Seema Guha, “Rice Reassures India of US Push for Deal,” Daily News and Analysis,
August 27, 2008.
⁴⁵ Ambassador William McCormick, “Building Momentum: Towards a Stronger U.S. - N.Z.
Relationship,” New Zealand Institute of International Affairs, May 3, 2007.
⁴⁶ State Department Press Release, “Secretary Rice Remarks with New Zealand Prime
Minister Helen Clark,” Government House, Auckland, July 26, 2008.
⁴⁷ Hank Schouten, “US Military to be Part of NZ Exercise,” Dominion Post, July 22, 2008.

relations.⁴⁸ In Congressional testimony in March 2008, Admiral Timothy Keating,
Commander U.S. Pacific Command, pointed to New Zealand’s participation in PSI
activities, including a planned PSI exercise to be hosted by New Zealand in
September 2008, and stated that “... we support New Zealand Defense Force
participation in approved multilateral events that advance our mutual security
interests.”⁴⁹ When asked if it were time to lift formal restrictions on military training
with New Zealand, Secretary of State Rice stated, “The relationship is not stuck in
the past ... if there are remaining issues to be addressed, then I think we ought to find
a way to address them ... because the relationship between New Zealand and the
United States is such a beneficial one.”⁵⁰ Secretary of State Rice’s visit to New
Zealand in July 2008 also raised speculation that progress may be made in
establishing closer trade ties.⁵¹
The United States and New Zealand also cooperate in other ways. The United
States and New Zealand have cooperated for over 50 years in the area of Antarctic
scientific research. United States military aircraft continue to use Christchurch as a
supply base for Antarctica. This logistical support was established in 1958.⁵² In
2007, the United States and New Zealand worked together with Germany and Italy
on a program seeking insights into Antarctica’s climate history as part of the
International Polar Year.⁵³ In 2007, the United States and New Zealand inaugurated
a Joint Commission Meeting on Scientific and Technological Cooperation.⁵⁴ The
United States and New Zealand also continue to work closely on intelligence
gathering and sharing.⁵⁵
Free Trade Agreement
Obtaining a Free Trade Agreement with the United States remains a key
objective for New Zealand and one that it has been working towards for several
years. New Zealand trade was once very closely integrated into the British

⁴⁸ Audrey Young, “War Games for NZ, US Troops,” New Zealand Herald, August 21, 2008.
⁴⁹ Statement of Admiral Timothy Keating, U.S. Navy Commander U.S. Pacific Command,
Before the House Armed Services Committee on U.S. Pacific Command Structure, March

12, 2008.

⁵⁰ Secretary of State Condoleezza Rice, “Remarks with New Zealand Foreign Minister
Winston Peters,” Government House, Auckland, July 26, 2008.
⁵¹ “Rice’s Visit Reflects Change in Relations - US-NZ Council Says,” New Zealand Press
Association, August 6, 2008.
⁵² “U.S. Antarctic Program,” United States Embassy, Wellington,
[http://www.usembassy.org.nz].
⁵³ Paula Dobriansky, Under Secretary for Democracy and Global Affairs, “Remarks at the

50^th Anniversary of U.S.-New Zealand Antarctic Cooperation,” U.S. Department of State,

June 27, 2008.
⁵⁴ Office of the Spokesman, “The United States and New Zealand Pledge to Advance
Science Partnership,” U.S. Department of State, October 30, 2008.
⁵⁵ Jim Rolf, “Let’s Just Be Friends: New Zealand and the United States,” Asian Affairs,
Summer 2003, p. 127.

Commonwealth. The desire for an FTA with the United States is part of an ongoing
effort to diversify trade. An FTA with New Zealand, some say, would likely more
closely integrate New Zealand with the United States in political as well as economic
terms. New Zealand and the United States “are currently working through our trade
and investment Framework Agreement to further deepen our economic
relationship.”⁵⁶ Senator John McCain has reportedly expressed his support for an
FTA with New Zealand.⁵⁷
While the impact of an FTA on the overall United States economy would be
small, such an agreement would likely increase U.S. merchandise exports to New
Zealand by 25% according to business groups ⁵⁸ while leading to a 0.5% decline in
the United States dairy sector.⁵⁹ Beef, dairy products, wood, sheep, machinery and
parts, fish, and fruits and vegetable are New Zealand’s leading exports to the United
States. Machinery, aircraft and parts, computers and parts, electrical appliances and
equipment, motor vehicles, food, medical and vet instruments, multimedia
recordings, pharmaceuticals, and fertilizer and insecticides are America’s leading
exports to New Zealand.⁶⁰
Institutional Support
There are several organizations and groups that help promote bilateral ties
between the United States and New Zealand including the United States-New
Zealand Council in Washington, DC, and its counterpart, the New Zealand-United
States Council in Wellington; the Friends of New Zealand Congressional Caucus and
its New Zealand parliamentary counterpart; and the more recent Partnership Forum.
The US-NZ Council was established in 1986 to promote cooperation between the two
countries and works with government agencies and business groups to this end. The
Friends of New Zealand Congressional Caucus was launched by Representative Jim
Kolbe and Representative Ellen Tauscher in February 2005 and has been supportive
of a Free Trade Agreement (FTA) with New Zealand. Members of the Caucus sent
a letter to U.S. Trade Representative Susan Schwab to “support the Administration’s
decision to enter negotiations on financial services and investment with P4 including
New Zealand.”⁶¹ The first Partnership Forum was held in April 2006 and, according

⁵⁶ Glyn Davies, Deputy Assistant Secretary of State for East Asian and Pacific Affairs,
Statement Before the Subcommittee on Asia, the Pacific, and the Global Environment,
House Committee on Foreign Affairs, March 16, 2007.
⁵⁷ Hon. Phil Geoff, Minister for Foreign Affairs, Media Statement, “Productive Discussions
with US on Trade Issues,” June 11, 2008.
⁵⁸ “Sutton Welcomes U.S. Groups Push for FTA,” New Zealand Press Association, February

17, 2005.

⁵⁹ Fred Bergsten & Robert Scollay, “The Case for a Model Free Trade Agreement Between
the United States and New Zealand,” [Prepared for the U.S.-New Zealand Council] New
Zealand Embassy, Washington, DC, [http://www.nzembassy.com].
⁶⁰ Hon. Jim Sutton, Minister for Trade Negotiations, United States-New Zealand Free Trade
Agreement.
⁶¹ “Friends of New Zealand Congressional Caucus Support Negotiations,” NZ-US Council,
(continued...)

to its chairman, former Prime Minister of New Zealand Jim Bolger, it “has been
credited with helping develop a new forward momentum in the relationship.”⁶²
The bipartisan Friends of New Zealand Congressional Caucus comprises some
70 Members of Congress. When launching the initiative, Representative Kolbe stated
“In order for the U.S. to continue being a world leader in free trade, we must work
toward a free trade agreement with New Zealand, as New Zealand will help open the
door to markets around the world.”⁶³ The FTA is also supported by the American
Chamber of Commerce⁶⁴ and the U.S. National Association of Manufacturers.⁶⁵
Representative Kevin Brady has since replaced Kolbe as the Republican co-chair of
the caucus. It has been described as a “bipartisan working group that will strengthen
and promote closer economic, political, and social links between the U.S. and New
Zealand.”⁶⁶
Policy Options
Continuing restrictions on bilateral military-to-military exchanges and training
are seen as acting to inhibit the full range of possible defense cooperation with New
Zealand at a time when it is moving to develop its defense capabilities and is eager
to work with the United States on a range of security issues. New Zealand shares the
United States’ democratic values and strategic interests and has demonstrated its
desire to work with the United States in the struggle against violent radical Islamists.
New Zealand plays a constructive role promoting stability in the Southwest Pacific
and beyond and could help in additional areas such as with maritime patrols in the
Straits of Malacca. For these reasons, some experts and former and current U.S.
government officials are calling for the removal of restrictions on defense
cooperation with New Zealand, which are increasingly viewed as a vestige of past
differences over nuclear policy, and for full engagement with a like-minded
democracy.⁶⁷ Expanding trade with New Zealand through the P4 agreement and/or
an FTA, some assert, could also act to strengthen ties between the two nations.

⁶¹ (...continued)
March 19, 2008.
⁶² Rt. Hon. Jim Bolger, “Second US NZ Partnership Forum to be Held 9-11 September 2007
in Auckland,” NZ - US Council, November 24, 2006.
⁶³ “Reps. Kolbe, Tauscher Launch Friends of New Zealand Congressional Caucus,” U.S.
Federal News, February 16, 2005.
⁶⁴ “American Chambers to help NZ Bid for FTA,” The Press (Christchurch), February 24,

2005.

⁶⁵ “NZ Wins Powerful Ally in Quest for U.S. FTA,” New Zealand Press Association,
February 3, 2005.
⁶⁶ “Kolbe and Tauscher Press Release: Friends of New Zealand Congressional Caucus,”
[http://www.usnzcouncil.org] .
⁶⁷ Richard Armitage and Randy Schriver, “Washington and Wellington,” The Asian Wall
Street Journal, April 24, 2006.

Other External Relations
New Zealand has traditionally had close ties with the United Kingdom,
Australia, and the South Pacific as well as with the United States. In recent years,
New Zealand has sought to expand its traditionally close relationships by reaching
out to develop closer ties, particularly through expanded trade, with Asian states.
Australia
New Zealand’s closest external relationship is with Australia, while its most
enduring relationship is with the United Kingdom. The closeness with Australia
stems from their common origins as British colonies and includes a strong rivalry in
rugby, which is New Zealand’s most popular sport. Relations between New Zealand
and Australia are formalized in the Closer Economic Relations (CER) and Closer
Defense Relations (CDR) agreements. With a common labor market, an estimated
400,000 New Zealanders now reside in Australia out of a total estimated population
of 4.2 million.⁶⁸ On a cultural level, shared national lore, such as the Australia-New
Zealand Army Corp (ANZAC) experience, which was largely forged at the battle of
Gallipoli in WWI, serves to reinforce ties between New Zealand and Australia. New
Zealand is, along with Australia, Britain, Singapore, and Malaysia, a signatory to the
Five Power Defense Arrangements of 1971. New Zealand is also a member of the
Commonwealth and an active supporter of the United Nations (UN). New Zealand
contributed troops along with Australia to WWI, WWII, Korea, Vietnam, and the
first Gulf War.
The United Kingdom
New Zealanders’ affinities for the United Kingdom (UK) remain strong despite
the UK’s decision to sever its preferential trade relationship with New Zealand, as
well as the rest of the British Commonwealth, in order to join the European
Community in the 1970s. The United Kingdom purchased two thirds of New
Zealand’s exports in 1950. In more recent years, the UK has dropped to New
Zealand’s fourth or fifth largest destination for exports. This has made the search for
new foreign markets a key aspect of New Zealand’s foreign policy. New Zealand’s
proactive and successful policy of export diversification has expanded New
Zealand’s markets to include Japan, China, the European Union, Australia, and the
United States.
Regional Role in the Pacific
New Zealand has an increasingly Pacific identity that stems from both its
indigenous Maori population and other more recent Pacific island immigrants from
Polynesia and Melanesia. While Maori represent 15% of the population, Pacific
Islanders comprise an additional 6.5%. Auckland is the world’s largest Polynesian
city. New Zealand Foreign Minister Phil Goff has described New Zealand as a

⁶⁸ “New Zealand: Population Flows Pose Major Challenges,” Oxford Analytica, June 26,

2008.

“Pacific nation.” New Zealand has a set of relationships with South Pacific island
groups that is similar to the relationships that the United States has with various
island groupings in the Western Pacific. New Zealand has had colonial and
trusteeship relationships with the Cook Islands, Niue, Western Samoa, and Tokelau.
Samoa became independent in 1962, while the Cook Islands and Niue became self
governing in 1965 and 1974 in “free association” with New Zealand. Tokelau may
soon achieve self determination. New Zealand remains engaged with the islands
through disaster relief, development assistance, and security stabilization efforts.
New Zealand also works closely with other Pacific Island states on a bilateral and
multilateral basis through the South Pacific Islands Forum, which is based in Fiji.
The Forum has supported the South Pacific Nuclear Free Weapons Zone, efforts to
promote sustainable use of fisheries resources, and regional security.⁶⁹

⁶⁹ “New Zealand in the Pacific,” New Zealand Ministry of Foreign Affairs and Trade,
[ h t t p : / / www.mf a t .govt .nz] .

Figure 1. Map of New Zealand

Chronology⁷⁰
1000First human habitation of New Zealand begins with the arrival of
Polynesian Maori people.
1642Abel Tasman of Holland makes first European discovery of New
Zealand.

1769British explorer Captain James Cook explores New Zealand.

1773Cook conducts further exploration of New Zealand.

1777Cook conducts further exploration of New Zealand.

1815The first European settlement of New Zealand begins.

1840Treaty of Waitangi between the British Crown and Maori Chiefs.

1841New Zealand becomes an independent colony of the British Empire.

1845-72New Zealand wars as Maori resist European encroachment on their
lands.

1893New Zealand is the first nation to give women the right to vote.

1907New Zealand shifts from colonial to dominion status within the
British Empire.
1914-18Approximately half the eligible male population of New Zealand
serve in World War I and New Zealand suffers one of the highest
rates of casualties.
1915The campaign on Gallipoli in the Dardenelles begins and is one of
New Zealand’s largest contributions to the war along with
operations in Palestine.

1939-45New Zealand contributes forces in support of the allied powers.

They fight in Crete and in North Africa at places such as Tobruk and
El Alemain.
1950-53New Zealand sends troops to fight with UN forces in the Korean
War.
1951New Zealand signs the ANZUS treaty with the United States and
Australia.
1960sNew Zealand sends troops to fight with the United States in
Vietnam.

⁷⁰ The chronology is largely drawn from “Timeline New Zealand: A Chronology of Key
Events,” BBC News, August 16, 2006.

1985Labour government of David Lange refuses to let U.S. nuclear
warships enter New Zealand harbours.
1986The United States suspends its alliance commitment to New
Zealand.

1990James Bolger of the National Party becomes prime minister.

1993Proportional representation is introduced into New Zealand.

1997Jenny Shipley of the National Party becomes prime minister.

1999New Zealand sends troops to East Timor with the United Nations.

Helen Clark becomes prime minister.

2002Clark wins reelection over a faltering National Party.

2004New Zealand and China begin free trade talks

2005Clark wins a close election over a resurgent National Party.

2006New Zealand troops return to East Timor quell unrest.

2008Elections to be called.