With a friend like Trump ...

The Hutt News - - FRONT PAGE -

Last week, New Zealand was given good rea­son to in­voke the old say­ing that it can take care of its en­e­mies, but only God can pro­tect it from its friends.

In walk­ing away from the West’s nu­clear deal with Iran, United States Pres­i­dent Don­ald Trump not only re-im­posed stiff new eco­nomic sanc­tions on Tehran, but threat­ened to im­pose sanc­tions on any coun­tries that helped Iran to achieve its nu­clear am­bi­tions.

Ini­tially, Trade Min­is­ter David Parker and his coun­ter­parts in Europe were some­what in the dark as to how widely the US would de­fine the trade it would re­gard as be­ing un­ac­cept­ably sup­port­ive of Iran. An­swer: all of it.

For New Zealand, the amounts at stake in our trade with Iran are sig­nif­i­cant, and were set to in­crease. We have had an Em­bassy in Tehran since 1975, thus mak­ing it New Zealand’s long­est-stand­ing diplo­matic mis­sion in the Mid­dle East. Dur­ing the 1980s, Iran was one of New Zealand’s top five ex­port mar­kets. Af­ter the Joint Com­pre­hen­sive Plan of Ac­tion nu­clear deal was reached in 2015 and eco­nomic sanc­tions were lifted, the trade be­tween Iran and New Zealand re­sumed again in earnest. We sent an of­fi­cial trade del­e­ga­tion to Iran last year, and sold $120 mil­lion of goods to Teheran in 2017, mainly com­prised of dairy prod­ucts.

All of this hard work and po­ten­tial eco­nomic ben­e­fit to our ex­porters has now been scup­pered by our good friend in the White House.

Prime Min­is­ter Jacinda Ardern has pro­fessed her­self to be ‘‘dis­ap­pointed’’ by the ‘‘back­ward step’’ Trump has taken. With in­de­cent haste, Ex­port NZ chief ex­ec­u­tive Cather­ine Beard in­di­cated that our ex­porters would al­ready be en­gaged in obe­di­ently shift­ing their busi­ness to else­where in the Mid­dle East.

‘‘Ex­porters are pretty fleet of foot when they need to be,’’ Beard said. ‘‘They hope­fully will have other choices, and they’ll start to re­di­rect.’’

New Zealand is not the only coun­try rush­ing for the exit. Since 2015, joint ven­tures worth US$10 bil­lion have been signed be­tween Iran and ma­jor Euro­pean com­pa­nies, to build ev­ery­thing from cars to air­craft. Th­ese at­tempts at peace­fully in­te­grat­ing Iran back within the global econ­omy now face ter­mi­na­tion.

The Trump ad­min­is­tra­tion is giv­ing for­eign firms trad­ing with Iran only six months to wind down those re­la­tion­ships, or face pun­ish­ing US sanc­tions. Across Europe, an undig­ni­fied scram­ble has be­gun for ex­emp­tions and grand­fa­ther clauses. In ef­fect, the Amer­i­cans are be­ing al­lowed to wield veto pow­ers over a sig­nif­i­cant swathe of world trade.

As Parker pointed out, scrap­ping the Iran deal will also en­cour­age nu­clear pro­lif­er­a­tion. Iran has now been given ev­ery in­cen­tive to pur­sue nu­clear weapons, and North Korea has been given ev­ery in­cen­tive to hold onto the ones it has. Al­ready, Saudi Ara­bia is talk­ing of at­tain­ing a nu­clear bomb.

Ul­ti­mately, it seems as though the cur­rent US Pres­i­dent has no con­cep­tion of diplo­macy (or trade) as be­ing based on com­pro­mise, and the pur­suit of the best achiev­able level of mu­tual ad­van­tage. In­stead, Trump is treat­ing global in­ter­ac­tion as a zero sum game where one side wins big, and one side loses big. Last week, that ap­proach looked more like a sure-fire way of en­sur­ing that ev­ery­one will lose.

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