Muldoon and the World
When you think about Sir Robert Muldoon, his foreign policy does not readily come to mind. Whatever else he will be remembered for it will not be his achievements on the world stage. We have vague memories of rude remarks about the Japanese, about Robert Mugabe, Walter Lini and Jimmy Carter; sharper ones of his indifference to world opinion over sporting contacts with South Africa. In his excellent biography, Barry Gustafson’s coverage of the subject is not always as thorough as the domestic politics, sometimes simply confining himself to the Prime Minister’s (admittedly extensive) travel itineraries.
Yet there was a Muldoon foreign policy, though he himself might have been wary of the thought. It was as scrappy, instinctive and matter-of-fact as the man himself. It was simply the external reflection of his familiar attitudes. He had no systematic view of New Zealand’s interests abroad, indeed would have distrusted such an approach. He was not a reflective man and he took up foreign policy issues only when he saw an opportunity or a situation which, in a favourite phrase, was ‘not tidy’.
He grew more interested in foreign policy in the course of his Prime Ministership, as he read the telegrams and talked regularly to overseas leaders. Through his travels he developed a growing interest in East Asia. In 1986 he asked for Foreign Affairs as a shadow portfolio and would have liked to serve as a senior statesman in that role. But in office his forays into external affairs were almost always in pursuit of domestic objectives – South Africa and CER obviously, but also his attitude to the revolutionary government in Iran, to the Falklands war and to Washington. His foreign policy was an extension of his political approach at home and he intervened in the Foreign Affairs portfolio as briskly as he did in any other. His aims were as traditional and conservative as his policies at home, and equally focussed on what he saw as New Zealand’s economic interests.
His mental map of the world was formed when he was a young man, especially by his wartime service in the New Zealand Division. He was comfortable with the British, held the Australians in no particular regard and always had a trace of the ‘anti-Yank’ sentiments which were common in New Zealanders of that generation. The war basically defined who your friends were. Years later he stood in a war cemetery in north Italy, looking down at New Zealand and South African graves and said “They fought with us, you know”.
His instinctive, domestically-oriented approach meant he had little time for diplomatic niceties. Had he ever thought about it he would have agreed with Lord Curzon that there are only two requirements in foreign policy: to know what you want and to make sure that others know it too. By that simple definition he excelled. His blunt opinions went round the world but he was largely indifferent to any but the domestic reactions. He distrusted his Foreign Ministry which he suspected, with some justification, of deploring his methods. That there were risks to speaking your mind he recognised, and he became more cautious with experience. But he was philosophical about the consequences. If countries like Japan or India were upset over fish or the closing of a diplomatic office, then this simply had to be accepted.
His most famous pronouncement was that ‘New Zealand’s foreign policy is trade’. It was not true even in his own day, as sporting contacts, the nuclear ships controversy and his interest in the Pacific demonstrate. But the comment reveals his own outlook and if there is a major theme in his foreign policy interventions it is the protection and advancement of New Zealand’s economic interests.
His greatest and most lasting foreign policy achievement was certainly the Closer Economic Relations treaty with Australia. His view of Australia was scrappy in both senses of the word. He was not averse to playing on the underlying Kiwi feelings by populist cracks about yellow stripes on Australian jerseys and emigration raising the intellectual standards of both countries. The public image was dominated by the famous one-upping relationship between him and Malcolm Fraser, almost a cartoon series featuring the lofty Fraser and the stumpy Muldoon who usually managed to get his wisecrack in first. A Prime Ministerial change in Canberra would not necessarily have altered this. I was present at a meeting between Muldoon and Paul Keating (then Treasurer) which descended into a furious verbal brawl. In the best tradition of dogfights, when John Stone (the Australian Secretary of the Treasury) and I tried to intervene to calm things we got bitten by both sides.
This background did not suggest an easy passage for the concept of CER. It was not made any easier by the Prime Minister’s justified suspicion that a free-trade agreement would undermine the highly-protected economy he had inherited and which he intended to preserve. New to my job I suggested in a discussion that this was a long-term advantage of CER, a gaffe swiftly covered over by the Secretary of Trade and Industry, Harry Clark, who pointed out that it was Australia alone that we were discussing.
So when Muldoon yielded to the persuasions of Hugh Templeton and his Australian counterpart, Doug Anthony, it was with considerable caution. His instructions to Bernard Galvin, Secretary of the Treasury, and to me were that he was happy for officials to explore and map out what might be possible in any agreement but that he remained agnostic and would reserve judgment until he could be firmly assured that it would not damage New Zealand industry. While the meetings and detailed discussion went on back and forth across the Tasman he kept in careful touch with the Manufacturers’ Federation and with leaders of business like Sir Laurence Stevens, making it clear to us that he would not move unless they were comfortable.
Negotiations were well-advanced before he came off the fence. The turning-point in my recollection was a visit by Doug Anthony in May 1981. Tidying up his papers at the end of a meeting the Prime Minister said, in a characteristic phrase that was the nearest he came to enthusiasm, “I think we can bring this thing together”. He was still half-tempted by efforts by the wine industry among others to seek permanent exemptions from the regime but these were successfully fended off and Government approval became a certainty. With an irony that he was too clever not to suspect his boldest step in foreign policy led in a short time and under another government to the destruction of the mixed economy which he regarded as New Zealand’s most distinctive achievement.
More traditional and more congenial to him was the patient and equally successful effort to preserve New Zealand’s access to the European Community. Britain was the key to this. As the previous buyer of almost all our dairy and sheep meat exports she had both a moral obligation and a practical interest in ensuring the smoothest possible transition. So Britain became the focus of our concerns and of Muldoon’s personal diplomacy.
It was congenial to him because he was on familiar ground. Like many of his generation he had a sentimental attachment to Britain, liked a royal wedding and liked calling on the Queen. But this was greatly reinforced throughout much of his Prime Ministership by the famous relationship with Mrs Thatcher. He admired her robust approach and political toughness, while she saw him, with perhaps a little more detachment, as ‘one of us’.
Towards this most feminine of Prime Ministers Muldoon could become arch and almost gallant in his manner. At a dinner he gave in London for Mrs Thatcher he spoke about the then-current split in the British Cabinet between Wets and Dries and said confidingly, “I am with the Dries”. This was something of a surprise since Sir Robert Muldoon was considerably more economically moist than the wettest of Mrs Thatcher’s Wets, but it says something of his regard for her, and something of hers for him that she insisted on coming to the dinner despite being ill with a feverish cold.
With Mrs Thatcher he followed one of the simplest of his unspoken maxims on foreign policy: stick by your friends and they will stick by you. He did so in small matters, compelling a less than eager Air New Zealand to equip their new 747s with Rolls Royce engines. And he did so over the Falklands.
I happened to be on the phone to London when the news of the loss of HMS Sheffield was received there. I told the Prime Minister who immediately arranged for a Cabinet meeting, called in the hapless Argentine Ambassador to expel him and decided that a New Zealand frigate would join the Armilla patrol in the Indian Ocean to free up a British frigate for duties in the Falklands. All this was done instinctively, without any analysis or discussion that I was aware of.
It has been criticised as an anachronistic example of blind devotion to the Mother Country. There was no doubt an element of that, even more a desire to come to the aid of Mrs Thatcher. But most of all, I believe, his motive was economic and hard-headed: to strengthen British support for continued access for New Zealand’s exports to the European Community. If so it worked. The British Government’s backing for New Zealand’s case became even more active, and faded only with the Anzus quarrel a few years later. And the Muldoon gesture made it politically easier for Mrs Thatcher to do this because it was widely appreciated in Britain. Some time later he was crossing the Atlantic on British Airways when the pilot came on the air to say ‘You might like to know that we have with us today the Prime Minister of New Zealand, Mr Muldoon, who stood by us over the Falklands”, and the whole cabin burst into applause.
His attitude towards the United States also had a strong element of economic self-interest. Although he had for many years travelled regularly to Washington for IMF/World Bank meetings he never seemed especially interested in American affairs, in contrast say with Norman Kirk. He was strongly anti-communist and saw the US as the essential guarantor of both political and economic freedoms. But underneath it all there lurked also the conviction that a small country like New Zealand needed powerful friends if its interests were not to be overlooked in the flux of international politics. He gave firm support to the US and in return did not hesitate to seek its support when our economic policies came under fire.
An early venture into US affairs was unhappy. Like a number of Asian leaders he distrusted President Carter, but unlike them he said so. Or rather, by referring to the President as a ‘peanut farmer’ and in speaking in less than complimentary terms of his brother and sister, he implied in a very Muldoonian way his suspicion of the President’s foreign policies. Not unnaturally President Carter took exception to these remarks. A scheduled visit to Washington was suspended and the Secretary of Foreign Affairs, Frank Corner, had to exert his considerable powers of persuasion on the Administration at an OECD meeting in Paris to get it reinstated. Muldoon became a little more cautious about speaking his mind on foreign leaders but he was unrepentant. Some time later he said to me plaintively “But I was right about Jimmy Carter, wasn’t I?”
He was more comfortable with the policies of the Reagan Administration. His interest in receiving an increasing number of American naval visits in the early eighties, though, may have had less to do with American wishes than his desire to sharpen the issue in New Zealand’s own political scene. (Was he perhaps encouraged by the ease with which Bob Hawke faced down his left wing on the issue in 1983?) But it was characteristic that he put the warm relationship with Washington to work for New Zealand’s economic gain.
His visit to the United States in 1984 was a classic example of the personal diplomacy he enjoyed. On his first morning in Washington the Secretary of the Treasury, Donald Regan, came to call. Muldoon tackled him on the need to continue New Zealand’s exemption from the Gatt Subsidy Code which otherwise would raise duties on our casein and other dairy exports. This was hardly the stuff of grand diplomacy but for Muldoon it was the business end of international relations – the rest, however interesting, was conversation. Regan protested, saying that if they did it for New Zealand they would have to extend the concession to everyone. Muldoon said in effect, go on Don, you can do it for us.
The next caller was the Secretary of State, George Schultz. The international scene was reviewed and the Prime Minister did not forget to put in a word on the Subsidy Code. Then Schultz left to brief the President. Half an hour later we were in the Cabinet Room at the White House with President Reagan flanked by his Secretaries of State and Defence. An hour’s discussion followed, with the President speaking from the famous index cards, helped out by his two Cabinet colleagues on points of detail, including of course the Subsidy Code. We adjourned for lunch in the Family Dining Room of the White House where the index cards were no longer needed and the President told jokes and was at his most charming. Then the two spoke to the press in the Rose Garden and the New Zealanders went home, having taken up the best part of a day of the US Administration’s time. And quietly he got his wish on the Subsidy Code.
Dealing with comfortable friends like Britain and the United States saw Muldoon at his most orthodox as a diplomat and negotiator – to use a favourite phrase, a ‘senior and experienced’ political leader talking to his counterparts. On unfamiliar ground his impatience and aggressiveness could produce less predictable tactics.
Japan was important in his pattern of international relations. As the world’s second-largest economy it could be a useful source of capital at a time when external borrowing was a major part of the Treasury’s activities. He showed no feelings about the Pacific War except to comment that he owed his life to the atomic bomb since he believed that had the war continued the New Zealand Division would have been shifted to the Pacific for the final assault on Japan. He respected the sort of senior and experienced leader thrown up by the Japanese system, like Nakasone and particularly Takeo Fukuda whose financial experience went all the way back to the London Conference of 1932. He spent some time trying to persuade the Japanese to open up their capital markets to New Zealand borrowing but was politely rebuffed.
He started inauspiciously with the fish-for-beef row. It was in his early, outspoken days when he was prone to what a colleague of mine unkindly termed ‘foreign policy by blurt’. In effect he withheld Japanese access to New Zealand fisheries until they granted better access for New Zealand beef. There was some doubt as to whether he was entitled to do this under the Law of the Sea but doubts never interested him (he told me on another occasion that in public life complicated issues had to be stripped down to their simplest terms.) His justification was that we had been murmuring to the Japanese for some time about beef access and had got nowhere. The only way to get the attention of a large and inwardly-focussed power was to take a dramatic stand. This was not unreasonable but unfortunately he reinforced this with some off-the-cuff remarks at a press conference (historically a risk with New Zealand Prime Ministers). These succeeded not only in gaining the attention of the Japanese but also in irritating them. The outcome was a stand-off which could not be claimed as a vindication of his method.
He was not a patient or a subtle negotiator; it was not in his blunt temperament. This was demonstrated in his sheep meat dealings with the European Commission. The Commission wished to impose a quota limit on New Zealand sheep meat exports to the Community. Since this was bound under the GATT agreement, a tariff reduction had to be offered and accepted by New Zealand. We did not like the concept of a limit on our shipments but for the time being the point was academic since actual exports were well within the proposed quota. On the other hand reducing the tariff would substantially increase returns to the farmer.
Negotiations rose up the chain to the point where the Agricultural Commissioner from Brussels, Finn Gundelach, came out to settle a deal. The two delegations met all day in the Cabinet Committee room. After lengthy discussions, as happens on these occasions, the point was reached where all could see the outline of an agreement: we would accept a revised quota and they would almost halve the tariff to 10%. Then, as everyone was getting their papers together, the Prime Minister suddenly said 8% and could not be moved.. We had a rather glum dinner at Vogel House, Gundelach went home furious, and after a decent interval we accepted the 10%.
Despite his celebrated saying and his preference for concentrating on New Zealand’s economic interests, his international interests had on occasions to stretch wider than trade. In most cases, though, his main concern was still domestic. Although he disliked the Soviet Union he clashed directly with it only once, over the Sofinsky affair. The Soviet Ambassador was caught handing money to the Socialist Unity Party. Muldoon sent me to London to seek British advice on the likely Soviet response if he expelled the ambassador. He accepted reciprocal expulsions, told the Russians he would go further if they did, and otherwise concentrated on the domestic implications of Sofinsky’s rash action.
The issue of sporting contacts with South Africa was also seen by him as primarily a domestic issue. He had campaigned on a pledge to keep politics out of sport, as had Norman Kirk, but unlike him he declined to adapt his stance to international realities. The result was the African boycott of the 1976 Montreal Olympics because of New Zealand’s presence and a major threat to the unity of the Commonwealth at the 1977 meeting. This was averted by the Gleneagles Agreement which called on governments to dissuade their sporting bodies from contacts with South Africa. Muldoon thought this was as far as he could stretch his election promise; years later he wondered if he had not gone too far.
When the issue surfaced again, with the Rugby Union’s invitation for a springbok tour in 1981, both he and his critics had hardened. He was angered by the cancellation of the Commonwealth Finance Ministers’ Meeting in Auckland and went to the Heads of Government meeting in Melbourne in a belligerent mood. To those around him his temper was uncertain and in the meeting his aggressive defence of New Zealand’s stance embarrassed even his friends.
In the end he decided to leave early, leaving some parting shots in a letter which he had drafted himself. He asked me to give it to the Chairman, Malcolm Fraser, to be read into the minutes. When I did Fraser exploded, saying “I am not going to read this” and refused even to accept it. It was neither a happy nor a dignified departure from Melbourne.
His motives over the tour have been endlessly analysed. He was of the generation that knew white South Africans as allies; he was also of the generation for whom provincial values and rugby were central. No doubt he saw political advantage in the issue – almost certainly it tilted the 1981 election in his favour – and he pushed it with all the vigour of his pugnacious temperament. But I think it was at bottom a matter of personal conviction and he had no illusions about the difficulties it would cause. When he was told of the Rugby Union’s final decision to go ahead he put his head in his hands and said gloomily, “I can see nothing but trouble coming from this”. He then managed to be overseas for a significant part of the tour.
Even more personal was his interest in the Pacific. Nothing in his background would have suggested this, and neither economic self-interest nor domestic advantage pointed clearly in that direction. He was however a strong supporter of the Pacific Forum and, I think, never missed a meeting. On these occasions his normal briskness was left behind in New Zealand and instead he became a benign Pacific leader. He understood and accepted the ‘Pacific way’ and, though he joked about the placid silences, he was happy to sit while issues were slowly talked through. Each year he briefed his delegation, solemnly advising them that pushing for brisk decisions was not the way business was done.
He liked Pacific leaders and was uncharacteristically sensitive about the requirements of mana and chiefly dignity. On one occasion we had dinner with one who became rather drunk at the table, to the point where disaster threatened. Muldoon became quite agitated and when our host had retired to the bathroom – not a moment too soon – he whispered urgently to me “We must go”. We left hastily, without saying goodbye, but face was saved. When we met our host next morning – looking as wan as it is possible for a high chief to look – the normal courtesies were restored.
He had come into office with a stern attitude on Pacific overstayers which the practical consequences and his own experience soon modified. The issue surfaced again in a different form in 1982 when the Privy Council in a strange decision declared that, by two quite separate acts of Parliament in the 1920s, the great majority of citizens of Samoa were also New Zealand citizens. This posed a major problem for both countries. Muldoon was content to let the issue be worked through methodically, in consultation with Samoa. Legislation restored the status quo but preserved the rights of those who had brought the case: all Samoans in New Zealand on the date of the Privy Council decision, whether legally or not, received New Zealand citizenship.
Muldoon felt that New Zealand and Australia had an obligation to the small countries and territories of the South Pacific, an obligation to attend the meetings and an obligation to help them overcome the handicaps of small size and isolation. He worked hard to save the Pacific Forum Line which had been established to provide reliable and reasonably cheap shipping services for island exports. This required large and growing subsidies and Australia became sceptical of the value of continuing. Muldoon, though, saw it as essential for Pacific development and was less concerned about the economics of it. The issue came to a head at the Canberra Forum in 1983 and caused yet another burst of ill-feeling between Fraser and Muldoon. My Australian counterpart, Sir Geoffrey Yeend, and I had to work hard to find a formula and avoid an open breach. In the end, Muldoon was successful and the Line survived.
His last two years as Prime Minister were taken up, amid increasingly difficult domestic issues, with a campaign for reform of the Bretton Woods system. This was a highly personal not to say quixotic crusade. There were few economists who agreed with him. But denouncing the “hard-line monetarist policies” of the IMF was not surprising in the man who had expressed considerable doubts in the sixties about New Zealand joining the IMF. And his “little man” politics, his concern to defend the farmer and the small businessman from the banks, could easily move to calls for debt relief for Third World countries.
Because of his shrewdness and financial experience he was listened to politely but none of the G7 showed any interest in his proposals. He was asked to set them out at the Davos Conference of world leaders and he (or rather Tim Groser) wrote an article for the influential American quarterly, Foreign Affairs. At the 1983 New Delhi Commonwealth Conference they got a warmer reception and a committee was established to pursue the matter. Developing country members, who had typed him as an old-fashioned racist, were pleasantly surprised to find him campaigning on their side against what were seen as the inequities of the international financial system. But his arguments generated no groundswell of international support and the crusade died with his time in office.
In his later years as Prime Minister he travelled more and more. He liked travel and was good at it. It provided an increasingly welcome respite from the burdens at home, and by refreshing his contacts regularly it did keep him well-informed. There was a longstanding routine: on to the plane, into the ancient rugby club jersey, a hearty meal with wine, some conversation to relax (almost the only occasions anyone could have a free-floating talk with him) and off to sleep. He was matter-of-fact about the emergencies of travel. His aircraft was stuck on the ground at Delhi in roasting heat. Word came that $300 would move us to the head of the queue. When his secretary wondered in an anxious whisper what vote to charge it to, a rumble came from the magazine under which the Prime Minister was dozing – “Put it down to disbursements”. He was also dogged about going through with his programme. When he was tired I once suggested a rearrangement so that he could have a nap. It was briskly declined: the Prime Minister had agreed to the programme and he would go through with it.
When he called on other government leaders he was listened to with attention. His was not a well-stocked mind – as far as I could tell he read only official papers, diplomatic cables and every magazine he could lay his hands on. But it was a powerful one. His concentration, force of character and lengthening experience gave him a considerable authority in discussion. His public frankness may have raised their eyebrows but he was never taken for a lightweight.
To those he met abroad he applied the same quick and instinctive judgments he did at home. And similarly those judgments once made were hard to shake, despite his resigned admission on one occasion that a significant number of them, like his appointments, would turn out to be wrong. There were people he liked and approved of: Fukuda, Margaret Thatcher, Lee Kuan Yew, Emeka Anyaoku (whom he backed strongly for Commonwealth Secretary-General), Paul Volcker and George Schultz for example. And there were people he most certainly did not: Malcolm Fraser, Sonny Ramphal, Walter Lini and of course Jimmy Carter. He could be extraordinarily rude when he felt himself challenged or discomfited and even on social occasions he never troubled to conceal his dislike. Fortunately for those who accompanied him his travel programmes were organised as far as possible to avoid such challenges.
His foreign policy record is a vigorous, pragmatic and complex as the man himself. His approach to any issue, abroad or at home, was that of a manager rather than a builder: if an opportunity arose or an issue was troublesome then something had to be done. For him action was always preferable to pondering about a problem. He put out a press release once which I thought would cause resentment in Bahrain. I intercepted it and went to him. He said, “You think I am wrong, don’t you”. I made some response and he went on, “You may well be right, but if we stop to reconsider everything we will never get on. Let it go.” This was the Muldoon philosophy in a nutshell: the urge to keep things moving coupled with a resigned fatalism about the possible consequences.
Paper given at the Fifth Parliamentary Conference, Wellington, 3-4 May 2002