After almost two generations of relatively stable, favourable global conditions, New Zealand’s place in the world is less assured, standing on ground that is rapidly shifting from accepted international norms.
A recently released report released by Ministry for Foreign Affairs and Trade (MFAT), Navigating a Shifting World, gives the government and exporters an outline of what to expect over the coming decade – and it is not an encouraging picture.
Stuart Horne, the head of MFAT’s Economic Division, highlighted some of the report’s key findings during a recent ministry roadshow with exporters across the country.
He said the report identifies three big shifts from the conventional “rules to power” governance of borders and relationships towards what the report calls a “multi-polar” world, where rules are more contested and relative power between states takes on a greater role in shaping international affairs.
“It is clear we are living in a more contested world, one we have not seen since the Cold War. Rules-based systems are under pressure, at a time when we need them more than ever to deal with issues like climate change,” Horne said.
The shift includes a move from economics-based relationships to ones reassessed in terms of security and military power. Meantime the legacy of covid and insecure supply lines has meant stockpiling is in vogue, with importers concerned about access to critical supplies and shipping certainty.
The report notes that “just in time” efficiency is giving way to “just in case”.
The authors also note NZ’s traditional sense of remoteness – which has meant the country has been strategically benign – is no longer the case. Pacific nations face shared threats of climate change and greater incursion from large powers.
This includes the shadow of the Chinese government taking a more assertive position in the region, making it a theatre for strategic competition.
The growing pre-occupation with territory and power has meant, internationally, that the ability to cope with existential threats such as climate change is diminishing, exacerbating conflicts over resources threatened for that very reason.
For NZ these tensions are coming as this country’s trade volume that falls under free trade agreements now sits at about 74% of total exports, up from 50% only five years ago.
The ministry provides some outlines on how to navigate an increasingly complex geopolitical landscape. This includes utilising NZ’s bilateral partnerships to better shore up foreign policy. Implementing recent FTAs will diversify the country’s markets further.
Horne said NZ can also ensure it spreads its trade risks through agreements like the lesser-known Indo-Pacific Economic Framework, which captures 14 countries including the United States and India, and altogether affecting 40% of global GDP.
But the ability to get FTA gains as substantial as NZ has enjoyed recently will be challenged, and even more so by having agricultural products that are now the most protected category on the planet.
The US and India remain the two largest FTAs to crack.
“But the US has been very clear FTAs are not a current priority for them. Meantime, India is a longer term aspiration, but remains a future goal for all of us,” Horne said.
