Security, economy, trade on agenda, as top EU diplomat visits NZ

The European Union is upping engagement in the region. Photo / 123RF

The European Union wants to look beyond the economy as it deepens relations with New Zealand, adding a strong security partnership to the already strong economic one.

That’s the word from Stefano Sannino, Executive Secretary-General of the European External Action Service (EEAS), the European Union’s foreign affairs arm.

Sannino’s role heading the agency makes him the equivalent of MFAT’s chief executive, Chris Seed.

He was in Wellington this week on a whistle-stop tour of the region, meeting his New Zealand counterparts and discussing where New Zealand and the EU’s relationship could go next. It’s a question on a lot of minds, particularly once the long-awaited NZ-EU Free Trade deal, which could come into force be as early as next year, cements the economic relationship.

“The relationship between the European Union and New Zealand has always been a strong relationship, but much more focused on trade and the economy and a little bit less on the security dimension,” he told the Herald during his visit.

He said New Zealand and the EU, separated by half the globe, had traditionally focused on the economic side of their relationship and security had not really featured.

Secretary-General of the European External Action Service Stefano Sannino. Photo / Supplied

“I’m not speaking about military security,” Sannino hastened to add - the EU is not a defence arrangement in the traditional sense - “I’m speaking more about the fight against information manipulation, counter-terrorism - all these elements”.

The European Union is not traditionally thought of as a defence organisation, as Nato bears most of the responsibility for coordinating the defence of Europe.

European minds are currently focused on an altogether more conventional war to the bloc’s east: Russia’s invasion of Ukraine.

New Zealand has backed Ukraine in that conflict, with multiple rounds of aid to Ukraine and sanctions on Russia. On the domestic front, there have been persistent questions over whether New Zealand could contribute more, including pivoting focus towards more “lethal aid” like shipments of weaponry or donating money for its purchase.

Asked whether New Zealand could “do more”, Sannino said he would not put the “issue” quite that way.

“New Zealand has been extremely present in this specific crisis, the material support, the alignment with sanctions, we work together in the international institutions.

“From a certain point of view, we have felt that New Zealand was part of the coalition,” he said.

Sannino said his visit to New Zealand was evidence of the fact that the world is becoming far more interconnected, and issues of security had become global rather than regional.

Prime Minister Jacinda Ardern and European Commission President Ursula von der Leyen shortly before announcing NZ-EU FTA negotiations had concluded. Photo / Thomas Coughlan

“There is an element of, let’s say ‘shifting’ in international relations,” Sannino said.

“The security theatre has become global - it’s difficult to make the distinction between security in the Atlantic or the Mediterranean or in the Pacific,” he said.

Areas of interest to the EU include preserving freedom of navigation in the Pacific, meaning ships should not suffer interference from other states, while navigating Pacific waters, and economic coercion, in which a country weaponises its trade policy in order to achieve certain outcomes.

New Zealand has strong views on both. Officials warn that New Zealand is heavily exposed to disrupted supply chains, because our economy sits at either the end or the beginning of them. We largely export raw materials and primary produce and receive finished goods.

Any disruption to international shipping hits New Zealand especially hard.

Likewise, economic coercion is a particular concern for a small, open economy that is particularly dependent on a handful of major trading partners. One of those partners, China, has made use of economic coercion in the past.

The Herald revealed earlier this year the Government currently has a work programme devising strategy to manage the risks of economic coercion.

Sannino said the “management of the relationship with China is incredibly complex for everybody”.

“It’s not something that you can put on the side,” he said.

Prime Minister Chris Hipkins meeting European Commission President Ursula von der Leyen in Brussels for the FTA signing. Photo / Supplied

“What we have been saying in Europe quite constantly that we do not want to ‘de-couple’, but we want to ‘de-risk’ in the sense that we want to reduce the risk of the dependencies that we have from some the import of critical raw materials or the over exposure of some of our industries in from China,” he said.

“We are trying to develop policies in order to reduce dependencies to provide our industries with alternatives, but also to diversify the suppliers so that you are not putting all your eggs in the same basket,” he said, citing raw materials like lithium for batteries, and the materials for solar panels, as ones where China had a particularly monopolistic position.

“There are a number of raw materials we are importing from China where they have almost a monopoly,” he said.

“There are a number of elements where we need to be a little bit more careful because we have seen that China has used economic coercion,” he said.

“We think at the end of the day we are not speaking about large amounts of [trade] but it’s important,” he said.

New Zealand’s trade with Europe is not large, but not insignificant either. We exported $5.9 billion to the bloc in the year to March 2023. The new trade agreement is expected to be responsible for adding $1.8b to this tally from 2035.

It’s still a far cry from trade with China, which received $21.6b in exports over the same period.

Sannino is realistic.

“We need to keep engaging China, engaging economically, engaging politically. The economic growth of China is in the interest of the world, not only of China,” he said.

“It’s the [question of] how we balance all these elements,” he said.