Feature
Waging trade in Southeast Asia
by Nick Smith
Why won’t New Zealand agree not to invade its ASEAN neighbours?
Unlike sport and politics, trade and politics always mix. Cricket administrators are trying to push the Zimbabwe issue to one side, but our trade officials are open about the problems of Burma.
Burma, re-named Myanmar by its military dictatorship, was recently in the news as two exiled MPs, U Daniel Aung and U Hla Oo, visited New Zealand and urged the government to impose sanctions.
Our trade with Burma is virtually non-existent – $5.9 million, mainly in milk powder – and there is doubt whether such a move would have any impact.
But the pair are also calling on New Zealand to add to international pressure to stop the dictatorship taking the rotating chair of the 10-member Association of Southeast Asian Nations (ASEAN).
New Zealand trade officials admitted in a meeting organised by the Asia-New Zealand Foundation in Auckland recently that Burma’s leadership would be an embarrassment to ASEAN founding members Indonesia, Malaysia, the Philippines, Singapore and Thailand, later joined by Brunei, Vietnam, Cambodia and Laos.
Pressure is being exerted on Burma for concessions, and it is this – the possible revoking of the dictatorship’s chairing of the organisation – rather than embargoes that might reap results.
And, frankly, officials are more concerned with New Zealand’s relationship with Southeast Asia, particularly this country’s continued refusal to sign the Treaty of Amity and Co-operation. This is the agreement in which New Zealand promises not to invade its Southeast Asian neighbours, a simple ask, one would think.
The sticking point, of course, is the Australian Government’s insistence on the right to wage pre-emptive war in defence of the Lucky Country (or more probably, keep its policy aligned with the Bush administration).
On the one hand, New Zealand wants to sell more and reverse its dire trade balance. On the other, it cannot abandon its ally, Australia. At least, that is how the foreign policy dilemma is presented by Dr Anthony Smith (associate research professor at the Asia Pacific Centre for Security Studies in Hawaii), Michael Richardson (a veteran journalist who has covered conflicts in Vietnam, Cambodia and East Timor and now a senior research fellow at Singapore’s Institute of Southeast Asia Studies) and Celia Caughey, vice-chair of the ASEAN-NZ business council.
Smith, Richardson and Caughey struggle to find any coherence in New Zealand and Australia’s position.
Richardson says there must be an issue in Helen Clark’s mind, perhaps concern that New Zealand’s signature might make Howard look silly. “I find it a rather strange position that Australia has adopted,” says Richardson of Howard’s, and by implication Clark’s, stance.
ASEAN has made it clear that it wants Clark’s and Howard’s signatures and Richardson describes the treaty as a “no-cost option”; its provisions have not compromised the regional interests of fellow signatories China, Russia and Japan.
Indonesia’s President Susilo Bambang Yudhoyono, in New Zealand for talks, says it is important that Australasia become members of the new East Asia Summit, created by ASEAN and due to meet for the first time this year in Malaysia.
“If we are talking about co-operation in Southeast Asia … then it must involve Australia and New Zealand,” he said.
The cost to New Zealand of not signing the treaty could potentially involve billions of dollars in trade and, says Smith, blow New Zealand’s historical advantage in the region – not being Australia.
New Zealand is seen as a relatively benign regional presence, more concerned with stability than any other issue, and is not seen by Indonesia as the mastermind behind the Timor operation.
This position should not be seen as altruistic pacifism. What other role could New Zealand fulfil? As Smith says, it is a case of making a virtue out of necessity.
But this advantage should be seized in pursuing untrammelled access to Southeast Asian markets. ASEAN already has a free trade area and, as Richardson notes, the combined GDP of ASEAN, Australia and New Zealand is $US1.2 trillion, not far short of China’s estimated GDP for 2003.
Since 2000, the balance of trade with ASEAN has deter-iorated from an approximate $200m advantage to more than $1 billion in the red.
Caughey points to tariffs, with New Zealand exporters to Thailand paying 9% duty on average ($33 million) and Thai exporters only 1.5%, comprising a comparatively measly $8 million.
Free trade deals, or one all-encompassing ASEAN-ANZ agreement, would eliminate this disadvantage, it is argued.
It is not all tariffs. Caughey says exporters need to do more to exploit this massive growing market, a population of 544 million in 2004.
But since the 2001 deal with Singapore, the trade deficit with that country has increased to more than $600 million, compared to just under $100 million in 2000.However, Richardson says focusing solely on trade is unfair; ASEAN sells more than it buys, but it also invests more in New Zealand and Australia than vice versa.
All three say government and business need to engage with ASEAN, arguing that it is both good economics and good geo-politics. Although the US has declared Southeast Asia as the second front in its fight against an abstract noun, Caughey and company argue for political and economic engagement as a better defence. It is better to wage trade than wage war, they say. Which brings them back to the Treaty of Amity and Co-operation – it can be difficult to conduct trade talks while simultaneously refusing to rule out military invasion.
