Australia and New Zealand seek closer trade ties with Asia
HISTORY is pitted against geography in Australia and New Zealand as the two countries go through the agonising motions of determining whether they should be part of Asia. History binds the two outposts of the British Crown to Europe but the governments in Canberra and Wellington realise that in an era of regional trade, their geographical location makes it imperative for them to push their way into Asian groupings.
It is this desire to get a more generous slice of the Asian trade pie that prompted both countries to bend over backwards to please Malaysian Prime Minister Mahathir Mohammad when he came Down Under recently. The meeting between Mahathir and Australian Prime Minister John Howard, replete with bearhugs and warm smiles, seemed to erase the memories of 1993, a diplomatic nightmare for them. Paul Keating, the then prime minister, had called Mahathir "recalcitrant" for staying away from the Asia-Pacific Economic Cooperation (APEC) summit in Seattle; the latter retaliated by banning Australian TV programmes and threatening sanctions. Even now, Mahathir has scant regard for the Australia-inspired APEC, promoting as he is the proposed East Asian Economic Caucus (EAEC), which excludes not only Australia, but the US too. Malaysia has also placed a freeze on Australian participation in the Asia-Europe summit meetings, the first of which was held in Bangkok last month.
Although there is no real change in Malaysia's economic strategy, Howard's conciliatory statements during his meeting with Mahathir indicate that he wants to improve ties with Malaysia. Howard told the press that he wanted to "minimise tension" between Canberra and Kuala Lumpur over the proposed EAEC. Mahathir did his bit by indicating that an Australian company was being considered for a $3-billion contract to build 27 patrol boats for the Malaysian navy, which would be Australia's biggest defence export order ever.
New Zealand, so far, has managed to avoid any conflict with Malaysia, the country's largest market in South-east Asia with a two-way trade of $800 million, four times what it was less than a decade ago. It is not surprising then that Wellington appears a little embarrassed about the campaign against Asian immigrants started by the fast-growing radical right opposition party, New Zealand First. At a formal meeting with Mahathir, Kiwi Prime Minister Jim Bolger went out of his way to emphasise that New Zealand's future lay in the Asia-Pacific region and that recent immigrants had enriched New Zealand society.
That Mahathir has been keeping track of the controversy over Asian immigration to New Zealand is evident from his comments at a press conference in Wellington. "Cutting back on Asian immigration but not of those coming from elsewhere will be seen by Asian countries as discrimination," he said. "Such a policy would also be interpreted as a sign that New Zealand is not really interested in being part of Asia". This drew an immediate response from Winston Peters, leader of New Zealand First, whose popularity has been riding piggyback on a virulent anti-immigrant campaign. Peters said his country "is not a part of Asia, nor do New Zealanders want it to be, no matter what advice Mahathir might have received from Bolger".
Even as the controversy over immigration in general, and the dramatic rise in the number of Asian immigrants, including Indians, Malaysians and Taiwanese, in particular, continues to simmer, Asians are all set to become New Zealand's top investors. Recent surveys showed that Asian investment approvals in 1994 (the last year for which figures are available) touched $1.74 billion, way ahead of the US ($1.54 billion), Australia ($652 million) and Britain ($226 million). Also, Asian investors form the largest group of overseas buyers of land in New Zealand, a sore point among some of the older settlers.
India is among the Asian countries that New Zealand is looking to for closer economic ties. A recent document on Asia, released by the Ministry of Foreign Affairs and Trade, says that "as India's reform pro-gramme achieves further liberalisation, the opportunities for New Zealand's exporting companies will grow fast". Going by the tenor of the document, which describes the Asia-Pacific as the "most dynamic region in the modern global economy", it is clear which way the wind is blowing. At this point, geography seems to be getting the better of history.