Harboring Doubt

A party challenges the U.S.

When last week's journey by Secretary of State George Shultz to Wellington, New Zealand's capital, was first planned, it was expected to be no more than a routine review of regional affairs with colleagues from Australia and New Zealand. The occasion for the visit was the annual meeting of signatories to the ANZUS treaty, a security alliance formed by the three nations in 1951 to defend the South Pacific. Instead, Shultz found himself embroiled in a conflict with friends. Only the day before, New Zealand's Labor Party had trounced the long-ruling National Party in elections. One of Labor's campaign pledges reaffirmed its call for a ban on U.S. nuclear-powered and nuclear-armed warships in its nation's ports and waters.

Such a ban has been a longstanding Labor Party goal. Even though fewer than a dozen U.S. warships, some nuclear powered, put in to New Zealand's ports each year under the terms of the ANZUS treaty, many of the country's 3.1 million people fear that harboring such vessels will invite attack in the event of a war between the superpowers. The U.S., however, believes this continued access to the ports is necessary because of the growing Soviet presence in the southwestern Pacific. The use of air and maritime facilities in Viet Nam, most notably the former U.S. naval base at Cam Ranh Bay, has led to substantially greater Soviet activity in the region in recent years. Explained Shultz to his hosts: "It is not just a question of insisting on access, but of how a military alliance works. What kind of alliance would it be if our military forces were not allowed to help each other?" As one top diplomat put it, "If you have one alliance where the U.S. can't visit, it could affect them all."

This issue, along with New Zealand's economic difficulties, was one of several debated in a keenly fought election. Unemployment is nearly 5%, high by the nation's standards. Although inflation is down to 4.1%, from a high of 16% in 1982, the country is saddled with a foreign debt of $6.1 billion and a budget deficit of nearly $2 billion. After Labor's victory, forecast by a major preelection public-opinion poll, the Reserve Bank of New Zealand suspended nearly all trading in foreign currency to prevent a run on the New Zealand dollar (then worth U.S. 62-c-) by speculators anxious to get their money out of the country. Three days later Labor Party Leader David Lange (pronounced Long-ee), who will be the next Prime Minister, announced an economic package that includes a 20% currency devaluation. Lange also proposed a removal of interest-rate controls, a three-month curb on prices and professional fees, and a review of export incentives. The Reserve Bank, breaking with precedent, hailed the plan; even the Anglican Archbishop of New Zealand, the Most Rev. Paul Reeves, abandoned his ecclesiastical silence and called on the country to support those working for a "way out of economic difficulties." Lange, 41, replaces the National Party's Sir Robert Muldoon, 62, who has been Prime Minister for nine years.

Overall, Labor won 56 of the 95 seats in the legislature. A lawyer and lay Methodist preacher, Lange projected more image than substance during the campaign, offering tax cuts and promising better economic management without getting into specifics. Once a 380-pounder, Lange managed to shed well over a hundred pounds, thanks in part to an operation that reduced his stomach's capacity to hold food.

Although Lange is considered pro-U.S., he gave no sign during his 40-minute discussion with Shultz that he is willing to alter his party's stance on the U.S. ships. But Reagan Administration officials are hoping that Australian Prime Minister Bob Hawke's Labor government will help bring Lange around on the issue. At the Australian Labor Party's biennial conference earlier this month, a move to prohibit visits to Australia by nuclear-equipped ships was defeated. Instead, Hawke's government has pressed the U.S. to pursue strategic-arms agreements with the Soviets; Australia also favors friendly relations between the U.S. and China as a means of offsetting the Soviets' regional influence.

Shultz at week's end was optimistic that an accommodation could be worked out. The Secretary noted that no nuclear-powered American vessel is scheduled to call on New Zealand until early next year. Thus his visit gave both sides a chance to review the issue "before government positions harden."