AUCKLAND, New Zealand — With the G20 leaders’ summit taking place across the Tasman Sea this weekend in Australia, Canada’s Prime Minister Stephen Harper and German Chancellor Angela Merkel will both drop by Friday to have brief chats with New Zealand’s Prime Minister John Key — the first by Canadian and German leaders here in nearly two decades.
But the leader who can really make or break the Kiwis’ economic future is China’s jet-setting President Xi Jinping, who has been invited to New Zealand this coming Wednesday for a three-day tour.
Since Xi took over as China’s paramount leader two years ago, there has been a dramatic push by Beijing to raise its profile across the western Pacific and to try to bind the countries of this vast region to China through trade. One of the spearheads for that has been this country, which has branded itself “NZ Inc.”
New Zealand is one of the “Five Eyes,” the exclusive intelligence club that also includes Australia, Canada, Britain and the United States that initially developed from U.K.-U.S. co-operation during the Second World War and grew during the early years of the Cold War. But in almost every other way, New Zealand has tilted away from the traditional allies since making a crucial strategic choice to shift its economy strongly toward reliance on business with China since signing a free-trade agreement with Beijing in 2008.
Prime Minister Stephen Harper takes part in a bilateral meeting with New Zealand Prime Minister John Key. THE CANADIAN PRESS/Sean Kilpatrick
More than anything else, New Zealand depends on the export of dairy products to maintain one of the most pleasant lifestyles in the world. China, which replaced Australia as New Zealand’s top trading partner last year, consumes nearly half of the milk, butter and cheese produced by the Kiwis, and that percentage is growing rapidly every year.
As the Government of Canada’s own trade website states, there is “only a modest level of trade” with New Zealand. The entire two-way relationship between Canada and New Zealand is worth less than $1 billion a year while New Zealand’s trade with China has surpassed $10 billion a year.
That means that Harper’s 30-hour visit is in many ways a courtesy call returning one that Key made to Ottawa in 2010. One of the purposes of Harper’s stopover is to remind New Zealand’s more than 4.4 million citizens that despite their country’s ardent desire to woo Xi and to develop even stronger trade ties with China, it still has friends in the West even if those friends are slowly becoming more like distant cousins than siblings.
The only significant issue between New Zealand and Canada has been that for years Kiwi governments have wanted Ottawa to drop stiff tariffs that protect Canadian farmers. But the Harper government’s reluctance to do that matters much less to New Zealand now that China takes in much of the Kiwis’ dairy exports.
Whichever way the talks on agricultural tariffs between Harper and Key go, Canada will likely be forced to lower tariffs on dairy products, anyway, if it wants to be part of the Trans-Pacific Partnership on trade that New Zealand, Singapore and Chile first proposed 12 years ago and which may finally be agreed upon in the next few months. The U.S. joined the TPP talks six years ago, with Canada finally agreeing only two years ago to be part of what are now 12 country negotiations.
Canadian Prime Minister Stephen Harper makes his way to his car as he arrives in Auckland, New Zealand. THE CANADIAN PRESS/Adrian Wyld
One of the reasons New Zealand still matters more to Canada than the meagre size of their trade relationship would suggest is that New Zealand has influence over several small South Pacific island nations — which usually vote the same way as it does at the United Nations.
Military trade remains one of the key areas where Canada and New Zealand still have strong ties. Canadian companies have sold high-tech upgrades for New Zealand’s P-3 Orion surveillance aircraft while New Zealand’s two frigates are likely to be modernized with lots of Canadian components and technical help in British Columbia.
That continues a relationship between the Commonwealth countries that was forged on the Western Front during the First World War and during the Second World War at pilot training schools in Canada and on the battlefields of Europe and North Africa.
Harper is to celebrate and honour that bond and Anzac casualties in the two world wars at a wreath-laying ceremony Friday at the Auckland War Memorial Museum. After that, the prime ministers are to hold bilateral talks on dairy tariffs and international crises in Iraq, Syria and Ukraine before sharing a private dinner.
Harper leaves New Zealand late Friday for Brisbane, Australia, where over the weekend he is to attend the G20 leaders’ summit.
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