As the Government weighs up whether or not to join the polarising Aukus defence pact, criticism of the deal is growing – but calls for New Zealand to become ‘the Switzerland of the South Pacific’ ignore the changing regional environment and what such an approach would entail, Dr Reuben Steff writes
In recent weeks, the Labour government has indicated an interest in joining pillar two of the Aukus security pact (the sharing of advanced military technologies, including quantum computing, artificial intelligence, cyber, undersea capabilities, hypersonic weaponry, information-sharing and electronic warfare). In response, opposition to Aukus from commentators, activists, and politicians has grown in intensity.
But without a robust and systematic debate that weighs up the pros and cons of New Zealand joining the deal, and a debate that also outlines the alternatives, we risk falling into an echo chamber of one-sided opinions without recognising the considerations behind the Government’s decision-making.
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There is no denying the trilateral pact has placed New Zealand between a rock and a hard place. Our security ties, values and broad foreign policy interests align us with both our sole military ally Australia and the US, of which we are a near-ally (we are part of the Five Eyes intelligence sharing arrangement, a majority of our military arms have come from the US since 2010, and our navies now regularly conduct joint operations in the Pacific).
Yet over 30 percent of our exports go to China and, despite repeated encouragement from the Government for Kiwi businesses to ‘diversify’ away from China, little inroads have been made; in fact, our economic dependence has increased during the Covid pandemic.
This balance is becoming harder to maintain as intensifying great power competition shows no sign of slowing down. In this new confrontation, the US expects its allies and friends – including New Zealand – to help contain China’s growing power, while Beijing’s economic power incentivises its own ‘strategic partners’ (New Zealand included) to steer a middle path. The list of states that have borne the brunt of Chinese economic retaliation includes Norway, Sweden, Australia, and South Korea to name a few, and such measures could easily be applied to New Zealand.
Often overlooked in the anti-Aukus discourse is the reality that China has enacted a staggering military modernisation enterprise. Between 2014 and 2018, China’s shipyards rolled out more naval vessels than the navies of the entire British, Indian, Spanish, Taiwanese, and German fleets combined; it is engaged in a nuclear breakout to expand the number of its nuclear weapons from approximately 200 to at least 1000 by the end of this decade, and its military spending has grown 10-fold between 1990 and 2020 – an expansion with no comparison in modern history. Beijing now accounts for over half of all military expenditure in Asia, with one of the the world’s largest ballistic missile force and the largest navy by number of ships.
Arguably, if a new Cold War between China and the US is underway, it pays to bet on the most powerful and dynamic side – which for now is the US and Australia, with Aukus a key decision point.
The question is, amidst this, what New Zealand should do about it all, especially as the risk of conflict over potential flashpoints like Taiwan is growing. While Chinese president Xi Jinping prefers to reunify Taiwan with mainland China peacefully if possible, he has also declared the issue cannot be passed down from generation to generation. What’s more, the US and Australia have not ruled out coming to Taiwan’s defence should it be attacked.
Aukus is a key defensive component of Canberra and Washington’s long-term strategy to deter and contain Beijing’s expanding military power. Should New Zealand break its independence and go all-in with the Aukus nations?
An intersecting number of points supports this position: geography has long dictated that we side with the world’s most powerful navy that protects global trade (that remains the US); New Zealand must get access to the emerging technologies of Aukus, lest it be left out and continue to fall behind; ties to Australia and the US are complemented by strong cultural, social and linguistic similarities; relatively seamless intelligence sharing already exists; the combined power of the US and its allies remains far larger than China and its partners like Russia and Iran.
Arguably, if a new Cold War between China and the US is underway, it pays to bet on the most powerful and dynamic side – which for now is the US and Australia, with Aukus a key decision point. Moreover, the American side is the defender of the existing status quo and the rules-based system that has delivered immense benefits to New Zealand, and to a good chunk of the world, since 1945. Trade with China could be severely damaged, even crippled, but security and making the right long-term bet trumps trade considerations; after all, other markets will be found.
Alternatively, should New Zealand reject Aukus and seek neutrality? Te Pāti Māori recently suggested New Zealand become the “Switzerland of the South Pacific”. Let’s take this to its logical conclusion: if the country went in this direction, it could engage a strategy of armed neutrality and self-reliance, bulking up its military and state capabilities to deal with emergencies at home, towards our national frontiers, and to respond to military or humanitarian contingencies in the South Pacific (given climate change, the nations of the South Pacific are extremely vulnerable to intensifying weather events).
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It would require reliable and diversified arms supply arrangements, the concomitant development of a domestic defence industry to reduce foreign dependence and a much higher defence budget. The advocates of this policy need to think through the implications of their well-intentioned ideas, given they may be just as costly as siding with either China or the US-alliance network – if not more so.
Switzerland is not formally part of Nato and has a significant agricultural industry, showing how this can coexist alongside a high-tech sector – something New Zealand would ideally want to facilitate a shift to armed neutrality. This is critical since an independent military capability starts with a strong economy.
Switzerland’s economy, standing at US$800 billion in 2021, allows it to spend just 0.7 percent of GDP or US$5.7b on its military. With this, it maintains 24,000 active troops (as well as 120,000 reservists), several frontline air squadrons and more for relatively small expenditure. By comparison, New Zealand’s economy in 2021 was US$250 billion, with a US$3.39b military budget in 2021, requiring 1.4 percent of GDP to help maintain 9300 active-duty troops (as well as 2500 reservists). Switzerland also has mandatory military conscription for every able-bodied male (females can volunteer for any position) and the army is interwoven with the country’s society.
In theory, New Zealand could engage with and learn from Switzerland. We would expand our military budget and capabilities, engage a strategy of self-reliance to enhance its resilience, ultimately providing a basis for a truly independent foreign policy. However, New Zealanders are already facing cost of living concerns. An ideological dedication to low taxes by Labour and National governments also means the country remains in first gear when it comes to state capacity, its military, welfare and health system and broader infrastructure. To be blunt, if we want more, we need to pay for it.
All of this is to say we are left in a precarious position. Our region is militarising. Our closest partners are gearing up to deter war – and if necessary to fight one – and they want us on their side. Our largest trade partner expects us to keep our head down. We in New Zealand need to get a debate over these issues fully out into the open and to start considering things to their fullest conclusions. The New Zealand people deserve to know what’s going on and what is at stake.
