Martín Pérez Le-FortAsia-Pacific Centre

Institute of International StudiesUniversity of Chilemperezl@uchile.cl

The Relationship between New Zealand and Chile: Not only Trade.

The Chilean Foreign Policy toward New Zealand has an increasing importance in its national objectives as an important part of the Pacific Basin. Chile has had historical links with New Zealand, specially since the XIX Century, when both countries had an important role in the maritime trade. But our relationship decreased because of they developed different views about the importance of their own regions and about their counterpart. Different senses of identity provoked a perception of distance that has been reduced recently.

Some elements of the Chilean Strategy toward the Pacific Basin.

- Context of international isolation (Human Rights problems).-Reassessment of the Pacific Basin during the Pinochet Dictatorship- Informal approach toward the multilateral system in the Pacific Basin. - An open economy- Some regional sympathies linked to the Cold War.- Economic more than political view about the Asia-Pacific (People’s Republic of China for example).

- International reinsertion post Dictatorship. - A more integrated and open economy.- Developing new markets.- Formal integration to the multilateral architecture of the Pacific Basin (APEC, PECC, etc.). - Open regionalism and pragmatic option for FTA.- Pragmatism in a limited political agenda out of its own region (but not in multilateral organizations).- New discourses supporting its Foreign Policy like “the bridge between Asia-Pacific and the rest of Latin America”.- Autonomy and capacity to manoeuvre in relation to its own regional arrangements to negotiate with a third extra regional players.

On the other hand, as a general comment, New Zealand has played an important role in the Anglo Saxon world. The relationship with United States is still very important, but with different views about important aspects of the international agenda (for example ANZUS is not very important). Australia is a regional priority (for many reasons including geographical proximity, cultural identity, etc.), and it has been expressed many times like in the Closer Economic Relations (CER, in 1983) and more recently in some documents like the White Paper. The relationship with East Asia is increasing and they are trying to develop FTA in that region as well.

Some possible international objectives

-Reshaping de la relationship between New Zealand and Australia developing closer links in Foreign Policy, trade, security, etc. But, they do not have a similar view about the nuclear issue (not yet), about the alliance with USA, and about the assessment of the regional security context.

-Increasing the integration and cooperation with Asian countries, with emphasis in economic (an eventually political).

- Increasing the stability of the Asia-Pacific Region (perceived as problematic).

- Importance of developing multilateral mechanism in the region to improve the capacity to face problems like regional security

-Relevance of USA in the New Zealand Foreign Policy economically, culturally, militarily. But the global influence of the USA is perceived in total agreeing with the New Zealand interests and perceptions.

- In a very different level, Cairns Group as a tool to reach national objectives in the WTO.

New Zealand-Latin America

New Zealand has a clear strategy toward Latin America. The bilateral partners are: Argentina, Mexico, Brazil, Uruguay, Peru y Chile (members of APEC and Cairns). New Zealand has wide priorities in that region, included an increased economical bilateral relationship, cooperation in the Multilateral organizations (Cairns Group/WTO, APEC, FEALAC, Valdivia Group, etc.), cooperation in international security topics (peace operations, specially peacekeeping operations), United Nations, Human Rights, disarmament, environmental protection, Antarctic. Option for increasing the people to people links in scientific cooperation, cultural exchange, promotion of the links between Media.

- Chile would be one of the key bilateral partners. They established diplomatic relations in 1945, but they had embassies in both countries only in 1972. In 2002 the negotiations to reach an economic agreement begins. This agreement was initially called P3 CEP or “Pacific Three Closer Economic Partnership with Chile and Singapore”, but Brunei Darussalam was integrated as well. Brunei Darussalam was given two years to negotiate its services and government procurement schedules and some flexibility on its obligations under the competition chapter. - The new name is Trans-Pacific Strategic Economic Partnership Agreement (Trans-Pacific SEP). - The benefits of this strategic initiative would be: the first FTA with a Latin American country; the first agreement between four individual countries of the Asia-Pacific Region (and APEC members); with an apparently strong focus on “strategic cooperation”.

It is important to remember that these negotiations were also concluded on two associated agreements: an Environment Cooperation Agreement and a Labour Cooperation Memorandum of Understanding (MOU). These associated agreements are subject to ratification of the Trans-Pacific SEP by the signatories, the three agreements are expected to enter into force in the beginning of 2006.

millions US$)Chilean Exportations

Chilean Importations

Trade Balance Trade Exchange

1999 9,6 27,5 -17,9 37,2

2000 9,9 43,1 -33,2 53,1

2001 9,5 27,9 -18,5 37,4

2002 9,2 17,8 -8,6 27,0

2003 21,0   18,5 2,5 39,6

2004 enero - marzo

6,7 4,8 1,9 11,5

Sorce: ProChile

The most important New Zealand exportations to Chilean products (in order) are: coal, machinery, chemical products, dairy (HS Chapter 4), seeds, miscellaneous food items, electrical machinery, pharmaceutical products, albumins, and lactose.The most important Chilean exportations (in order) are fruit and nuts, other fish products, copper, beverages, wood, fish and seafood, preserved food, prepared meat and fish, inorganic chemicals, and plastics.* Chile currently applies a flat tariff rate of six percent on virtually all imports.

In my view, the question is: what is the strategic content of this agreement?When we talk about “strategic partnership” we are developing a long term commitment. In this sense, what means “political engagement” in both Foreign Policies?

We have a complex agenda with some similar views about the global issues. Only as example, what is the link between this strategic partnership and other multilateral commitments like “Valdivia Group”, APEC, United Nations, etc? This is a FTA with an excellent marketing, but apparently, this is not a strategic partnership in a wide sense, and in a more economic sense of strategy, we are still competitors in some areas, what about it? In this point, we need to develop complementarities under a realistic assessment of the economic, cultural, social, and environmental impact in both countries and to share similar views about international issues. That is a strategic partnership!

It is necessary to assess deeply the associate agreements on science and technology, the agriculture and forestry industry and export promotion. Are they realistic? For example, our experience in environmental protection in the forestry industry has defined new interests in our public opinion, it does not means the possibility to change rules about this issue, but increasing the governmental control (it is still very weak). Are our policies asymmetric in this sense?

Maybe, in this associate agreement, we could define potential areas of a wider cooperation, including a more active role of the rest of both societies. On the other hand, people to people contacts are important, specially academic links (and educational in general). The academic world could collaborate to assess this agreement under a wider and independent view to detect opportunities. I am thinking in joint (NZ and Chile) research groups for this activity.

From my view, and only as one example, energy security in an increasing common issue to face and to develop cooperation. On the other hand, energy investment (for example in infrastructure) is a good opportunity.

Some general questions are the following:- Are there common perspectives about the new scenarios in the Pacific Basin (for example, the Chinese, Japanese or American roles) coherent with our national interests?- What is the perception of other global issues?- Indeed, is Latin America relevant for New Zealand?-Was this agreement the best agreement? or were we waiting for more important players (like USA)?- In a wide sense, could we build a more stable strategic scenario without those players?- Are we looking for obtaining credentials as FTA partners to reach other realistic strategic objectives? -¿How to build a common identity about international issues, including a different kind of agreements?- Is this one a different kind of agreement?I am sceptic but not pessimist.