Biden's Saudi trip may help NZ reset relationship with Middle East

By Geoffrey Miller*

Opinion - US President Joe Biden's controversial fist-bump with Mohammed bin Salman (MBS), the Saudi crown prince, may help New Zealand to forge its own new direction in the Middle East.

Biden's trip to Israel and Saudi Arabia showed that despite real concerns over human rights, the Middle East's strategic importance in the current global geopolitical jigsaw puzzle cannot be ignored.

Biden's meeting with MBS in the Saudi port city of Jeddah - four years after the horrific killing of journalist Jamal Khashoggi - was a triumph of realism over idealism.

In essence, Biden's trip was all about convincing Saudi Arabia to increase oil production to try to bring down the global fuel prices that have risen sharply since Russia invaded Ukraine in February.

Biden might have called Saudi Arabia a 'pariah' for the Khashoggi killing during the 2020 presidential election campaign - but Vladimir Putin is now Washington's main adversary.

And in the Middle East itself, the threat of Iran - which the US claims is about to supply military drones to Russia for use against Ukraine - is also a higher priority for Biden.

New Zealand policymakers will be watching Biden's moves in the Middle East.

After all, New Zealand has also been trying to rekindle its own relationship with the Gulf. Foreign minister Nanaia Mahuta visited New Zealand's lavish, NZ$60 million pavilion at Expo 2020 Dubai in the United Arab Emirates (UAE) on her inaugural overseas trip in November last year - and she also managed to fit in a side-trip to influential Qatar while she was in the region.

Mahuta pointedly avoided a trip to Riyadh, but Biden's meeting with MBS will be a signal to New Zealand and other Western countries that the time is right to bring Saudi Arabia in from the cold.

The wealthy Gulf Cooperation Council (GCC) - a six-country grouping made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - is already New Zealand's eighth-biggest trading partner.

It holds the potential to become an even more significant market for New Zealand exports, especially in the key areas of meat and dairy.

Indeed, the very modest gains achieved by New Zealand for meat and dairy in its recent free trade agreement with the European Union mean that improving trade with other key markets - such as the Middle East - is more important than ever.

As Western attitudes towards China have soured, New Zealand ministers have been keen to make trade diversification a major priority.

To that end, Trade Minister Damien O'Connor embarked on a major mission to the Gulf in March to try and restart New Zealand's troubled free trade negotiations with the GCC.

A deal with the bloc was signed in 2009 but remains unratified from the Gulf side.

The last big push to try and get the deal over the line was in 2015, under the previous National-led government, when Prime Minister John Key toured Kuwait, Saudi Arabia and the UAE.

Around the same time, the ill-fated 'Saudi sheep deal' was devised by Key's foreign minister, Murray McCully, in an unsuccessful bid to appease a prominent Saudi investor who was upset by New Zealand's ban on exporting live sheep by sea. The deal involved New Zealand sending significant amounts of cash and air-freighted sheep, but it largely ended in embarrassment - and did not deliver the FTA that New Zealand sought.

An acrimonious intra-Gulf split in the years that followed - which saw Qatar isolated by several GCC members - subsequently ruled out any further progress on the deal from the Gulf side. But those divisions were largely resolved last year.

Fast forward to New Zealand's Labour government in 2022, and O'Connor's trip was surprisingly successful. It resulted in FTA negotiations between New Zealand and the GCC being restarted.

As part of NZ's trade recovery and diversification strategies, we welcome reengagement with the Gulf Cooperation Council on an FTA following my visit to the region. Find out more ➡️https://t.co/901n36GxRF

— Damien O'Connor (@DamienOConnorMP) April 8, 2022

But despite this success, New Zealand made surprisingly little fanfare of O'Connor's successful foray into the Gulf. While the trip was announced as part of wider international travel plans, no press release on the outcome was issued after the minister's trip. O'Connor's report to Cabinet on the travel is also yet to be publicly released.

To be fair, O'Connor did tweet about his visit to Riyadh - calling it 'productive' - and he also announced the 'reengagement with the Gulf Cooperation Council on an FTA' in another tweet in April.

Productive visit to Riyadh, meeting with @GCCSG, @KSAMOFA, @MEWA_KSA, @malkassabi. I valued our wide ranging and useful discussions on the bilateral relationship and regional issues. pic.twitter.com/2aNvHkpiJ9

— Damien O'Connor (@DamienOConnorMP) March 9, 2022

The minister also touched on the talks with the GCC in a speech to the New Zealand Institute of International Affairs in May. In that address, O'Connor said New Zealand would focus on "goods market access" in the negotiations, but would also be seeking "to update and modernise the agreement" in other areas such as labour and environmental standards.

Arab media provide some further detail about O'Connor's movements on his March trip.

A report by the Bahrain News Agency from 8 March said a meeting between O'Connor and GCC Secretary General Dr Nayef Falah Al Hajraf "discussed the means to enhance economic and investment relations between the GCC countries and New Zealand". A few days later, the same outlet reported that New Zealand had signed a "strategic food security partnership" with the UAE.

The Arabic-language Al-Ain news website even produced an elaborate infographic about the food security deal and O'Connor's visit.

Of course, the government may have decided that a low-key approach to the talks with the GCC best serves New Zealand's interests, especially given the difficulties faced in the past.

Sensitivity over Saudi Arabia

But another reason for keeping a low profile domestically almost certainly relates to the sensitivities over the involvement of Saudi Arabia, the most populous country in the GCC by far and its driving force.

In addition to New Zealand's own concerns over the Khashoggi killing in 2018, a political firestorm erupted in early 2021 when it was revealed that Air New Zealand - of which the NZ government owns 51 per cent - had been repairing engines for the Saudi military, despite Riyadh playing a leading role in the war in Yemen.

At the time, Jacinda Ardern called the arrangement "completely wrong" and said it did not "pass New Zealand's sniff test". Air New Zealand summarily terminated the arrangement and returned the remaining parts with the repairs incomplete.

Eighteen months later, the GCC seems willing to turn the page and reconsider a trade deal with New Zealand.

But just as MBS expected Biden to meet him in exchange for Saudi Arabia pumping more oil, he will probably expect Ardern to personally visit the Middle East to seal any free trade deal with the GCC.

Of course, New Zealand has considerable experience in balancing human rights and trade issues from its careful handling of the China relationship.

And while Joe Biden has received heavy criticism for his trip, the visit also gave the US president an opportunity to raise the killing of Jamal Khashoggi directly with MBS - and to call the murder "outrageous" while Biden was on Saudi soil.

Will Jacinda Ardern now follow Joe Biden's lead - and give MBS a fist-bump of her own?

* Geoffrey Miller is the Democracy Project's international analyst and writes on current New Zealand foreign policy and related geopolitical issues. He has lived in Germany and the Middle East and is a learner of Arabic and Russian.