Time for NZ to be smart and positive
system for WTO global trade rules. This means the disputes body could grind to an effective halt next year because it is running out of judges.
To most New Zealanders, the WTO may well seem like an esoteric sort of thing – a bunch of bureaucrats sitting in offices in Geneva.
But our apples wouldn’t be in Australia without the WTO’s disputes system, and our beef wouldn’t be in South Korea. New Zealand has taken eight disputes to the WTO as a principal complainant, including for butter access to European countries back in the 1990s, and most recently for beef exports to Indonesia. New Zealand has also been involved in more than 40 disputes as a third party to other members’ complaints, a process that has benefited our exporters.
Imagine the uncertainty if we could not actually have the rule of law applied when we came up against another unfair trade barrier. It wouldn’t only affect any disputes that eventuated; it would affect the whole system of trade if there were no final, fair and binding settlement process. So, we need to pay attention to these threats to the systems we have come to take for granted. And New Zealand businesses need to support the Government in protecting these systems, because they count.
In recent years, New Zealand has described itself as having a benign international environment; yet now we are in a part of the world that is being contested between the two great economic and military powers of the time – China and the US.
And the international norms we have relied on for decades are under stress. New Zealand is a founding member of the UN, the WTO and the OECD. Other acronyms pertinent to our region (the likes of Asean, Apec and EAS) are also important to us since they put great powers and the rest of us in the same room. A lot of these institutions undoubtedly have to update themselves to deal with changing realities – for instance, digital trade, artificial intelligence, and nanotechnology. But that doesn’t mean they are irrelevant.
The question, of course, is what do we do. We can passively watch, or – as is the New Zealand way – try to be smart and to exert a positive influence.
New Zealand looks towards countries that are ‘‘like-minded’’ when it is up against challenges in the region. While historically this may have meant liberal values and an open economy, it will increasingly mean countries with similar concerns to us – for instance, those that have to navigate the China and US relationships quite thoughtfully.
I would argue this is a time when our relationship with Asian countries will mean more than just exports. They have more experience in dealing with tensions between great powers than New Zealand does, and have felt these battles more acutely. Asean countries have had to navigate changing power dynamics for some decades, and we can learn from them. We already have a good structure in place to enable this through our existing integration partnership forum with Asean and Australia, and it is good to see the Government investing more in that.
These are interesting times. We all have a stake in the systems (trading or otherwise) that have developed internationally over the decades. Borrowing sentiment from the 18th century philosopher Edmund Burke (who said, ‘‘The only thing necessary for the triumph of evil is for good men to do nothing’’), the only thing necessary for us to lose the rulesbased trading system is for businesses to do nothing.
This is a time when our relationship with Asian countries will mean more than just exports.