12 July 2013

The announcement this week of a free trade agreement with Taiwan was deliberately kept at a low-key level by both the Taiwanese and New Zealand governments for fear of upsetting China, but its significance should not be downplayed.

Not only is this the first free trade agreement of its type, it also means New Zealand becomes the first country in the world to have free trade agreements with all of the entities in the broad Chinese realm – China, Hong Kong and now Taiwan. It is a huge step forward for New Zealand exporters, and the consequence will be that the already healthy economic relationship with Taiwan will grow even stronger.

As a long-time supporter of Taiwan, I am naturally delighted at this development. But I think its significance lies far beyond just the economic aspect. Since 1949, the China/Taiwan situation has been internationally awkward, with each claiming sovereignty in and over the other. Martial law in Taiwan and China’s Cultural Revolution both exacerbated the situation and led to over 50 years of diplomatic stand-off. President Chen’s Taiwan independence sabre-rattling of the early 2000s, while rocky at the time, has paved the way for the more pragmatic approach of President Ma, which has not only thawed relations between Taipei and Beijing, but has also led to a growing role for Taiwan in the international community.

The great battles of gaining a voice at the World Health Assembly and World Trade Organisation tables have passed, and China’s angry disdain for its cross-Straits neighbour has given way to respectful curiosity   and greater regard for traditional family links. Over 50,000 Taiwanese businesses now operate in China and the air lanes between the two are amongst the most heavily used in the world.

That is where the free trade agreement assumes its real significance. It is but a further example of Taiwan’s integration into the modern international environment. The New Zealand connection is important – not just because of our extremely close links to Beijing, but also because of the increasing cultural and indigenous links to Taipei.

But I do not think New Zealand’s work is yet done. Just as we have used our economic and cultural relationships with both China and Taiwan to positive tri-lateral effect, we now have an unparalleled opportunity, gently, but slowly and surely, to do likewise with our political relationships. Our Pacific partnerships could provide an example of how China’s future relationship with Taiwan might evolve.

New Zealand, China and Taiwan have shown considerable skill, sensitivity and tact in addressing the issues surrounding the economic relationship. Now is the chance for working together to achieve similar progress on the political front.

After all, New Zealand, like Taiwan, is a small thriving island democracy living in the shadow of a larger and more dominant neighbour, with whom we share similar values. And we have worked out how to succeed more often than not. And we are frequently how much we “punch above our wegiht”!

I am sure we can do likewise in helping Taiwan with its large neighbour, our apparent new best friend.