Aukus hits headwinds as NZ mulls involvement

The visit of the Chinese foreign minister, Wang Yi, to New Zealand last week was a chance to focus on the health of the bilateral relationship – yet a security pact between three entirely different countries loomed over the proceedings.

Chinese displeasure with the Aukus deal spilled over into talks in Wellington, with Foreign Affairs Minister Winston Peters confirming Wang had raised New Zealand’s exploratory discussions about the elements of the pact focused on advanced technologies (better known as Pillar Two).

Peters was unrepentant, saying it was New Zealand’s right to decide its own security interests and that he had made sure Wang “understood that we did not have imaginary concerns about long-term security”.

Yet while those tentative discussions carry on, the broader Aukus deal is encountering some headwinds that may slow its progress – or even throw it off course.

Earlier this month, news that the US Navy was ordering just one (rather than two) Virginia-class submarines in 2025 led Australian media to question whether the Aukus deal was in doubt.

Though Pillar One of the deal is based on Australia eventually building its own nuclear-powered submarines for service in the 2040s, it is meant to purchase second-hand US submarines before then as an interim measure – something that would be harder if it has fewer ‘spares’ to sell off.

The former Australian intelligence analyst and Lowy Institute international security programme director Sam Roggeveen cautions against putting too much weight on the latest news, but says the longer-term trends for American shipbuilding are unpromising in their own right.

“The kind of shifts that the Americans – with some help from Australia – are looking to achieve are pretty substantial to go from just over one to two, or slightly more than two, nuclear-powered submarines a year in the US,” Roggeveen says.

There are separate concerns about how quickly the UK will be able to produce the nuclear reactor cores that will go in the Australian-made submarines, given reported delays with cores for its own Dreadnought vessel.

The Australian government has made moves to ease these potential obstacles, announcing on Friday it would pay the UK almost $5 billion to expand British production capacity, having earlier committed billions more for similar support to the US.

But University of Otago international relations professor Robert Patman says there are broader questions about the wisdom of committing so much money to vessels that may not be entirely futureproof.

“They may be state of the art now, but will they be in a decade’s time, given the tremendous pace of innovation and technology changes?

“For example, the Chinese are in the process of developing submersible underwater drones, which could well offset the impact of such expensive acquisitions.”

‘All bets off’ under Trump

Patman has previously outlined his opposition to New Zealand taking up a role in Aukus, questioning the wisdom of placing any bets on US leadership in the Indo-Pacific and the wider world.

He argues the American approach to Israel’s war in Gaza could deal “a body blow” to Aukus, given condemnation in some quarters of US President Joe Biden’s failure to halt arms exports to Israel or to take any other meaningful action over concerns about the failure to protect civilians.

“If the official rationale for Aukus is defending the rules-based order, then the key member of Aukus has undermined that message by its behaviour in Gaza … the US believes it can be selective about upholding international law when it comes to supporting a key strategic ally like Israel, but for smaller countries like New Zealand, we don’t have that luxury.”

There is also the orange-hued elephant in the room, in the form of a potential second term for Donald Trump.

Patman says “all bets are off on Aukus” if Trump returns to power, with politicians in Canberra – and Wellington – likely to have a tough time selling the public on involvement in a pact overseen by Trump.

Even if the Government can make that sales pitch, there is the minor matter of whether Trump would see US spending on Aukus as a worthy investment, given his previous criticism of alliances such as Nato.

“Trump has held very few positions consistently throughout his public life,” Roggeveen says, “but one that he has held on to doggedly is this idea that … the US needs to back away from these alliances because they don’t serve American interests, they are merely a way for the allies to spend less of their own money on their own defence.”

Though members of the Trump administration worked to “frustrate his instincts” in his first term in power, that may not be possible a second time around; such fears were last week implicitly addressed by UK foreign secretary David Cameron, when he said Aukus needed to be “in the best possible shape” before November’s presidential election.

‘My overarching concern is that by disregarding Pacific priorities in its rush to secure market and military access to deny China, Aukus is creating the very instability in the region that it claims to address‘

Pacific historian Marco De Jong

There is also the question of how the Aukus deal is being perceived by regions such as Southeast Asia and the Pacific, who may not have a direct stake in the pact but will nonetheless be affected.

Opinions in some countries have shifted since it was first announced, with the likes of the Philippines and Indonesia now less hostile – or even outright positive – than they were in late 2021.

David Capie, the director of Victoria University of Wellington’s Centre for Strategic Studies, says many of the Asean countries are privately more understanding of Aukus than their public positions would suggest.

“For some key Asian partners, like Japan, joining Pillar Two would, if anything, help perceptions of New Zealand,” Capie says.

But Patman argues continued concern about the implications of Aukus is unlikely to help the Government here as it seeks to forge new trade ties and diversify exports away from China.

“How do you achieve that sort of diversification? Do you do it by aligning with traditional allies, or do you do it by maintaining excellent relations with traditional allies, but actually having a position where they believe you are capable of taking an independent stance on issues that matter to them?”

Concern in the Pacific has been largely expressed by former rather than current politicians, Pacific historian Marco De Jong says, with little overt criticism of potential New Zealand involvement when Peters visited Polynesia earlier this year.

Instead, leaders have focused on the “Blue Pacific” vision of a security approach based on nuclear disarmament and climate action – an approach De Jong says could be thrown into doubt if New Zealand was to adopt Aukus’ “securitised approach to the region”.

“My overarching concern is that by disregarding Pacific priorities in its rush to secure market and military access to deny China, Aukus is creating the very instability in the region that it claims to address.”

Aukus debate to rage on

Declaring the demise of Aukus would be premature, however.

Roggeveen says political support for Aukus in Australia is “rock solid”, with no likelihood of retreat in the medium term given most of the deal’s costs are backloaded and concerns about China’s increased assertiveness are far from fictional.

“We’re really witnessing here the most dramatic rise of any military power since the Second World War – it’s pretty astonishing what China has achieved over the last 30 years in terms of its military modernisation, and it’s only natural and perfectly right for Australia and others to respond,” Roggeveen says, only taking issue with whether Aukus is the right response.

Within New Zealand, Capie says he is struck by how many Aukus opponents are unwilling or unable to see the role that China’s actions have played in the pact’s creation. While Australia’s decision to upgrade its submarines triggers outrage, China’s own military expansion and use of coercion against its neighbours goes unmentioned.

While Aukus supporters appear to be significantly outweighed by critics in most public commentary, there is talk among the former camp of the need for a “public diplomacy centre” able to debunk myths and explain the need for the agreement.

Capie says the information vacuum around critical aspects of the deal, such as which advanced technologies could actually be included in Pillar Two, has made it harder for prospective supporters to make their case against the “loud voices” opposed to New Zealand having any sort of association with the agreement.

“It’s hard to advocate for joining Pillar Two when we know so little about it or what it might cost, but equally it would seem strange to point blank rule out collaborating with your closest security partners on emerging technologies like AI or cyber.”

In short, says Capie, “there’s a lot of heat but not much light”.

The current coalition is unlikely to rule New Zealand in or out of Aukus any time soon, given the number of unanswered questions that still need to be addressed – including whether the three countries will even choose to admit outside members in a lesser capacity.

Given that, the debate is set to rage on – for better or for worse.