New Zealand and Asia-Pacific Integration : Sailing the waka in ever-widening circles

2015 – Discussion Paper 17/15 – Brian Lynch

Published by Centre for Strategic Studies: New Zealand Victoria University of Wellington

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CONTENTS
Introduction…………………………………………………………………………………… 1
Asia-Pacific: An overview…………………………………………………………………… 2
Tackling familiar challenges………………………………………………………………. 3
New definitions and terminology………………………………………………………… 5
Shifts in regional dynamics and the New Zealand dimension…………………………. 6
The tapestry of New Zealand’s bilateral relations……………………………….……… 8
Small state relations………………………………………………………………………… 10
Asia-Pacific’s move to centre stage……………………………………………………….. 11
Refocusing New Zealand’s interests……………………………………………………… 12
Economic Integration………………………………………………………………………… 16
Process, pressures and pathways…………………………………………………………. 16
The multilateral trading system: Whither or wither? …………………………………… 17
From bilateral to sub-regional and mega-regional……………………………………… 18
APEC: Agenda and contribution………………………………………………………….. 20
Free trade area of the Asia-Pacific: Concept and content ………………………………. 22
The mega-regionals: RCEP and TPP ……………………………………………………… 23
Economic integration: What it means for New Zealand……………………………….. 28
Asia-Pacific: The security dimension……………………………………………………… 30
Regional peace and progress: The underlying assumptions…………………………… 30
Regional stability: Why it matters to New Zealand……………………………………… 32
Regional tensions and flashpoints………………………………………………………… 33
Regional security mechanisms: ASEAN centrality……………………………………… 35
Regional security: The interplay of major power interests…………………………….. 38
Regional security outlook: Caution prevails…………………………………………….. 60
Regional security instruments: limited utility…………………………………………… 61
Economic and security integration: Moving along different paths…………………… 62
Implications for New Zealand: Challenges and opportunities………………………… 63

New Zealand and Asia-Pacific Integration
Sailing the waka in ever-widening circles1
Introduction
The processes of change to the economic and security landscapes in the Asia-Pacific region affect the public good and the rhythms of private life. This paper identifies the mix of forces driving the changes underway. It assesses the extent to which it could reasonably be said the related processes are linked to each other and mutually supportive rather than discrete and moving along different paths. The picture emerges of a region with much to its credit but showing many signs of structural stress. Both economic and security spheres are host to an impressive number of intergovernmental accords and regional and sub-regional agencies in place. What is their contribution, or what could it potentially be, to the region’s future growth and stability?
The paper focuses particularly on the possible implications of this evolving regional landscape for New Zealand. Why? Because there are constant reminders that developments and trends in the Asia-Pacific region matter seriously to New Zealand. For the first century and a half of European settlement, New Zealand’s view of the world was largely determined by its historical background and ancestry. While long-held links with Europe still count and will endure, by and large the country’s geography now set its horizons of clear and present interest. This reorientation has major significance for the country’s long-term vision of where it fits in the world. It influences where neighbours and partners, globally and regionally, perceive New Zealand’s place to be and how they form views on the country’s appeal as a potential partner. The relative isolation factorthe distance from othersis unchanged but the level of external engagement has grown exponentially. The image of New Zealand as a lonely outpost of European culture and heritage in a far-flung corner of the globe has well and truly gone. Beyond question, the Asia-Pacific has become the central focus of New Zealand’s core interests worldwide. The country is hard-wired into the region in multi-dimensional ways, for which there is no precedent in its history.2

A host of reasons help to explain why this has happened. It is not coincidental that, at the same time as New Zealand’s focus has relocated, the Asia-Pacific region has assumed a pre-eminent position in the global economy and is providing much of the energy driving international trade. The region is home to an expanding network of significant trade and security groups, and New Zealand is closely associated with most of them. There are also other considerations contributing to the Asia-Pacific’s importance to New Zealand. It provides a springboard for foreign direct investment (FDI), sustains the growth in tourism numbers, is a major supplier of overseas students and, as the 2013 national census revealed, is the point of origin for the most rapidly growing group of migrants to New Zealand.3
Of primary interest to New Zealand and its neighbours, the region has become a 21st century case study of the capacity of economic interdependence to smooth the edges of historic grievances and obstinate territorial disputes. Unarguably, whether through political, economic, security, defence or other prisms, what happens in the Asia-Pacific, and particularly the way neighbours behave towards each other, bears heavily on New Zealand’s ability to promote its own regional presence and how successfully and profitably it does so.

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