Protecting access to UK markets
In mid-1961 came the first formal announcement by the UK that it intended to enter the European Economic Community (EEC). Even before this, New Zealand had mounted a diplomatic campaign to protect its markets in meat and dairy products. Those interests would be seriously damaged by the loss of preferential access to the British market, where the bulk of these exports were sent. The objective was to protect access to the UK for key commodities (especially lamb and butter) for as long as possible, while New Zealand sought to diversify its export commodities and export markets. External Affairs participation in developing policy on the EEC strengthened its role in economic policy-making.
Diplomatic posts in Europe
To advance its strategy, New Zealand expanded diplomatic representation in Europe beyond London, Paris and Geneva. Representation at EEC headquarters in Brussels (1961) was the critical step. New posts were also opened in Italy (1965) and West Germany (1966).
The Luxembourg agreement
The landmark Luxembourg agreement with the EEC, granting New Zealand a special arrangement for farm exports to Britain, was reached in mid-1971 after months of knife-edge negotiation. Once New Zealand had secured this key objective, it expected that its diplomatic representation in Europe could be reduced and resources redeployed. This did not occur. Issues requiring negotiation with the EEC (and its successor, the European Union or EU) continued to arise, and broad-based bilateral relationships with EU members generated important new work.
A key player in extending diplomatic relations with China was New Zealander Rewi Alley, who lived there from 1927. Sixty years later, in 1987, he was given a state reception in Beijing. At his funeral later that year, New Zealand Prime Minister David Lange said that very few foreigners had committed their whole lives to China, as Alley had done.
Economic and political diversification
To implement the other leg of the EEC strategy – diversifying markets for New Zealand exports – new posts were opened in South Korea (1971), Chile and Peru (1972) and Mexico (1983). The 1970s was an era of détente (easing of hostilities between Cold War adversaries) so posts opened for geopolitical reasons in China and the USSR in 1973. There were also new economic and trade opportunities. The wealth of oil-producing states led to missions opening in Iran and Iraq (1975), Bahrain (1977) and Saudi Arabia (1984).
New Zealand and Australia
Greater attention to trade opportunities in Australia led to negotiation of the New Zealand Australia Free Trade Agreement (NAFTA) in 1965 and to the Closer Economic Relations (CER) agreement in 1983. CER in particular removed most barriers to trans-Tasman trade and substantially integrated New Zealand’s economy with its larger neighbour.
Free trade agreements
From the late 1990s negotiating free-trade agreements became a foreign policy priority. A landmark agreement with China was concluded in 2008 but other targets, notably Japan and the United States, remained elusive.