Careful steps as global pecking order shifts

It seems incontrovertible that the global future will be affected by the sequence of democratic choices made in Europe and America in the second part of 2016. A flood of opinion and prophecy engulfs us currently about the causes and the effects. Yet It is far too early to predict with confidence the full consequences whether for New Zealand or for the world more generally.

These 2016 convulsions occur at a time of unprecedented change in the relative economic weight among important economies in the world. Despite a destabilising 2008/09 global financial crisis, emerging economies, particularly China and others in Asia, have proven largely resilient, although previously remarkable growth rates have slowed.

It is essential that China and other major emerging nations accept principled responsibility to play a constructive and equitable part in the management of the rules-based international system. Yet the United States and other established powers have, to this point, proved reluctant to concede modifications to the pecking order fashioned by them in earlier times.

The 2016 trans-Atlantic political changes could signal further additional and significant complications. Major emerging economies frustrated at delay are themselves now devising instruments for financial and economic co-operation. That feeds concern in Washington and elsewhere that newcomers are intent upon changing established order.

Opportunities conferred upon NZ by this shift in global economic gravity now define substantially the country’s modern dependency. While retaining authentic global trade and other interests, regionalism in Asia Pacific is paramount. American engagement in the region is important, although this is not necessarily the same thing as leadership, at least in East Asia. Leadership is either bestowed or it is asserted. In East Asia several governments collectively cherish leadership of their own region, even as they welcome US engagement.

Negotiations proceed about deeper and wider regional economic co-operation involving all East Asian governments (and NZ) but where US is absent.

Obviously NZ cannot stand aside from such a process even as we officially regret American repudiation of the sub-regional and sub-optimal Trans-Pacific Partnership. NZ’s present favourable economic situation has been secured in the absence of formal trade ties with America and on the back of concentrated world wide trade effort. Yet any American relapse into greater protectionism would, with its wide knock-on effects, be a cause for serious alarm.

The 2016 democratic choices in Europe and America are symptoms of misgiving about consequences domestically of unregulated free market globalisation. We may be at the threshold of some serious second thoughts about free market wisdom. Likewise, fears about a surrender of national decisionmaking to unaccountable regional or global authorities also explain the outcomes. Pressures on established or prospective international arrangements about trade, climate change, arms control and disarmament, people movement, poverty reduction and refugees are therefore clearly on the cards.

The US presidential result promises that impulsive personality will be a larger factor now in international relations.

Experience over the past 30 years or more illustrates NZ can operate successfully beneath the radar screens of the powerful as ‘‘a friend but not formal ally’’ of any major power; while remaining committed to international rulesbased order for great and small alike. It is essential to strive to retain this judicious balance in the circumstances changed by 2016. It will not be simple and on different issues NZ may find itself keeping different and non-traditional company.

Properly resourced NZ diplomacy will be essential alongside those security/ intelligence capabilities that have received such prominence and additional resource from government in recent times, with American encouragement. Diplomatic judgment will be at a premium as NZ navigates a post2016 world. Things will get harder if ‘‘making America strong again’’ in Washington entails yet greater US self-exemption from international rules or norms of behaviour on trade, the environment, human rights, international justice or war fighting. NZ’s sense of shared values with the US may decline. Whether a distracted post-Brexit Europe will be as concerned with boosting equitable international rules, is likewise at issue.

Finally, 2016 has been notable for the NZ presence on the UN Security Council (UNSC) as a non permanent member. That is a comparatively rare experience and involved a considerable effort to win a place. As the tenure ends there are inevitably questions about whether it was all worth the effort – what influence did NZ really exercise on the UNSC? This is the wrong question. Rather, it is what influence does council membership now have upon NZ?

First-hand exposure over two years to disappointment and frustration at council deadlock because of great power discord (on Syria, the Middle East peace process etc) reinforces the absolute necessity for independent NZ judgment. Fallout from 2016 decisions inside Europe and America now places even greater premium on further refining that judgment.

Terence O’Brien is a former diplomat and senior fellow at the Centre for Strategic Studies.