VIEWS FROM OUTSIDE THE APIARY: IAN FLETCHER
Will the Trump Restoration make any difference to New Zealand’s place in the world? How will it shape our domestic politics and debate? Perhaps too much ink has been spilled on this already, but it is worth reflecting on what does and doesn’t change, and what to watch.
The main reason to look at this is that the new US administration will dominate headlines for quite a while, and we might be in danger of reading them wrong.
Firstly, the relationship between the US and Australia will be really important for New Zealand. Australia has invested heavily and systematically in making itself indispensable to the US in regional (and global) defence and security. I think Australia will prove to have been successful, and its partnership with the US in defence will endure.
Why? Big commitments (AUKUS especially) have been inked, so there’s a sense of partnership. The Australian Federal Government devotes a great deal of time and talent to defence and foreign affairs. Because State governments in Australia manage health, education and policing, the federal Government has political and intellectual bandwidth available for defence. Because Australia is a high-wage; high-tax economy, its governments have enough money to do stuff and build or buy what they need. And finally, there’s political consensus around the proposition that Australia has to be strong.
New Zealand has none of these features. But we do have the advantage of not being important, so we are unlikely to be too much of a target. But we need to be realistic: any free trade agreement with the US is now off the table. US tariffs will hit us, if they’re imposed, and that will be unpredictable, and bad. We would be very silly to offer public comment on US politics or policies, as the Trump administration will have a thin skin, and have little tolerance.
What about the Five Eyes? Successive New Zealand governments since the 1940s have all, without exception, wanted to be part of this arrangement. (The history is curious: New Zealand never actually signed the relevant agreement; rather, the then Prime Minister, Peter Fraser, gave Australia permission to sign on our behalf.) Membership of the Five-Eyes means we do not have a genuinely independent foreign policy, and we never have. Having opinions is not policy; policy is what governments can do, not just say. We will rely ever-more on Australia, as the US gets less reliable and predictable.
What of the Five-Eyes in the future? I think it likely that there will be a price for our continued membership, and that price will be higher defence spending. So be it. Our current defence force is an expensive gesture, and rationally we should spend more, or abolish it. The latter won’t happen, so I expect we will see our defence spending rise, putting more pressure on government here to raise taxes.
Tax will be the big issue in the next New Zealand election, in any case, as the pressures on the health system rise, and as we fail to face up to the need to limit superannuation to those most needy. But all that is for another column.
What of China? China’s economy is in slow-motion decline (driven by its aging, falling population). But China is still an important market for New Zealand and Australia. So, we will watch US/China relations closely, and avoid public criticism of either, if we can. We do that now. Otherwise, there’s not much we can do to shape the US/China relationship. But we need to be prepared if it goes badly wrong.
Wrong would mean actual armed conflict over Taiwan, or a sudden regime collapse in China or in Taiwan. All are unlikely; neither is impossible. All could be really damaging to New Zealand. We have no plan. We never do. I know this Cassandra-like warning will never be heeded, but my conscience requires me to say that we need what’s called a “War Book” – a plan for regional conflict that is already in place and can be implemented immediately and effectively. It wouldn’t be military; it would deal with the maintenance of an acceptable standard of life in New Zealand if we are wholly or partly cut off from the rest of the world for a period of time. We can’t rely on others; we must become more self-reliant.
For those unfamiliar with the story, Cassandra was a Princess of Troy in classical mythology, given the gift of accurate prophecy, and the curse of never being believed.
And what of all the effort we have put into the world trading system and market access since the early 1980s? It’s over. We need to bury that set of beliefs and assumptions, and face up to a world where economics (the allocation of scarce resources) and politics (also the allocation of scarce resources) overlap more than we want. It’s going to be a more transactional world, and tough for a small exporting country with little or no leverage. Actually, this has been under way for some time – I date it back to China’s accession to WTO a quarter of a century ago. But we can’t go on pretending. As a colleague once said, “being right is not enough”.
Trump’s real gift to us will be the end of this pretence.
We need to face up to a lot of things, and we really now have no excuses: my list includes taxes, public services, Crown-Māori relations, relations with Australia, and effective and professional core public service, infrastructure, a modernised environment of science, innovation and investment in ideas (not land), national self-defence and resilience, effective and well-funded regional government, environmental policies that don’t depend on pine trees, well-managed trading relations with every possible market (including much better support for our companies). That’s before we get to health, education, crime, and our own aging population.
We’re small, fragile and insignificant. No-one cares, really. Even we don’t really care about ourselves. Denial is not a policy. Nor is hope. Cassandra was right; Troy burned.
Ian Fletcher is a former head of New Zealand’s security agency, the GCSB, chief executive of the UK Patents Office, free trade negotiator with the European Commission and biosecurity expert for the Queensland government. These days he is a commercial flower grower in the Wairarapa and consultant to the apiculture industry with NZ Beekeeping Inc.
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