Tampa, Ardern and positioning small countries

Written By: - Date published: 7:30 am, November 16th, 2017 - 41 comments
Categories: australian politics, China, Globalisation, helen clark, International, jacinda ardern, labour, Politics, trade, us politics - Tags:

Does anyone remember the time that Helen Clark accepted refugees from the boat sunk off the northern Australian coast, the Tampa?

I was there as she was speaking in a Titirangi hall during 2001 where she got the call making the ask from Australian Prime Minister John Howard. She made the decision live on stage to take in those refugees to assist Australia (and as well as being humane, it made for awesome electoral politics!).

There’s a pretty strong parallel to the Tampa response, and what Prime Minister Ardern is seeking to do with another set of refugees also rescued from off the Australian coast, and it has a lot to do with offering more of what a small nation can offer within international diplomacy. Making the offer at APEC and again at ASEAN is pretty high profile stuff. Right in the middle of giant countries like Canada, the United States and Japan at APEC and ASEAN, sometimes small nations like New Zealand can be seen to make a difference.

This is what these international track-meets are for. Among other things, it reasserts that international rules and norms established under multilateral frameworks like the UN and APEC are necessary for the smooth functioning of the world’s countries below the giants of this world, whereas a small move from a giant can be exceedingly damaging to smaller countries no matter its intention.

This approach to rules-based international engagement is in stark contrast to the United States currently. From the Paris Accord to Unesco to the TPP, President Trump has a record of withdrawing from international agreements and institutions. The North American Free Trade Agreement and the Iran deal are both at risk. The Trump administration has a preference for using the scale of the US for bilateral deal-making rather than working through multilateral institutions.

Others, from Japan to the European Union, are stepping up their efforts to support multilateral institutions. But this is challenging in a multi-polar world when big-power interests vary significantly. Chinese cheerleading for globalisation, for example, should be interpreted cautiously. Although the statements of support are welcome, China’s support for an open international system is asymmetric, reflecting its mercantilist preferences – and its willingness to weaponise trade policy to advance its strategic interests at a national level.

Even in a more complex external environment, small countries lie ours can build advantage by combining the “artificial scale” of regional groupings with creative strategic positioning. This does not eliminate the risk of small countries being hurt by big powers, but we shouldn’t be fatalist.

Another multilateral rules-based organisation, the World Trade Organisation, has become a locus of big-power competition. China has benefited from WTO membership since 2001, and there seems to be a view in the Trump administration that the WTO does not serve US interests. The US is stopping the appointment of WTO appellate judges to hear trade disputes: One of the core functions at the WTO may grind to a halt.

Separately, the EU is discussing tightening restrictions on Chinese acquisitions of European firms.

The open, rules-based trade system upon which small countries like ours truly depend is under real pressure. In many large economies, there is growing political demand to more explicitly defend national interests. Big powers seem increasingly inclined to use their muscle strengthened by nationalist and isolationalist sentiment, integrating international economics with their strategic agenda.

Taken together, these big-country moves against international rules-based agreements suggest a marked shift in the functioning of the global economic and political system. Some of the immediate effects are masked by a recovering global economy, and markets do not seem concerned about structural institutional risks. But this is no reason for complacency. The extent of the weakening of international institutions may only become apparent in times of stress.

Small countries like ours, from Singapore to New Zealand, have prospered in a rules-based system that has provided consistently improved access to markets as well as reducing their exposure to predatory behaviour by larger economies.

You can see the importance of the WTO to solving trade disputes often in our favour, using agreed international rules, rather than simply being ignored or trade-retaliated by the larger powers, here:

New Zealand won another such case against Indonesia only five days ago.

But a more discretionary system is emerging, in which governments of large powers play a more deliberate role: from the preference for bilateral deal-making to the development of big-power national champions. Small countries like us are exposed to these developments, and we will need to continue adapting to this changing context.

There are a few ways in which small countries can respond, some of which are extensions of current behaviour. First, being embedded in regional economic and security groupings – like the EU and Nato, or CPTPP – to provide market access and to allow small economies to “bulk up” in international engagements, from negotiating free trade deals to developing a security posture.

Second, diversifying economic and political relationships to avoid concentrated exposures, and to allow for creative balancing. Prime Minister Clark’s work to gain the Chinese Free Trade Agreement was instrumental to balancing the historic weighting with the United States and Australia and diversifying to Chinese interests.

And third, developing a strong national value proposition – such as strong competitive advantage, key infrastructure and new technologies – which makes you valued by other countries. New Zealand has been consistently weak in this set of areas while many other smaller nations have been much, much clearer in articulating it and become the stronger for it.

Historically Helen Clark with the Chinese FTA and with refugee intake, and now potentially Jacinda Ardern with the CPTPP and with refugee intake offers, show that it is possible to remain positive about the outlook for a small country operating within the direct ambit of exceedingly large and powerful countries. It’s still possible, among an era of competing great powers, to be confident in the future positioning of us littlies.

41 comments on “Tampa, Ardern and positioning small countries ”

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  1. Zorb6 1
    16 November 2017 at 8:38 am

    Pushing to take the Manus Is refugees should ensure a one term Govt and also succeed in pissing Australia off.

  2. patricia bremner 2
    16 November 2017 at 8:54 am

    We have become more inward looking since the run up to the GFC when many of our second tier financial bodies collapsed so quickly, and many a future was changed.

    Soon after that we had NZ disasters to overcome, and while we dealt with those a neo-liberal government began stripping us of our public wealth, shifting it to private hands.

    So we had our home issues and the needs of others took a lesser priority.

    Now we have a collaborative government, a coalition of views about a fairer kinder society, where we consider the fate of the weakest with less blame and more realization of fallout from politics.

    It follows most of us want to tell the world of our stance through large and small gestures to those hurting elsewhere. It confirms our new image and makes a statement of intent.

    Most are relieved that the many elephants in the room which were previously denied, are being discussed and managed. The failures in housing, health, education, and inequality, and especially climate change which will impact all.

    So we are small and buffeted by change inside and out, but enough of us know we need to work together to overcome some of our huge problems, and that money may not solve some of them. People of good will might.

    • Zorb6 2.1
      16 November 2017 at 9:02 am

      What you say is commendable.We do, however have a lot to address here in NZ .Sending a message to the world that we are a ‘soft touch’ is probably not a good idea.

      • Ad 2.1.1
        16 November 2017 at 9:37 am

        As Helen Clark’s government showed, it is possible to do good and not be afraid. She showed that we could do good in the wider world, and seek to address significant issues domestically.

        Prime Minister Ardern, similarly, is reminding us that we really can walk and chew gum at the same time.

        • Zorb6 2.1.1.1
          16 November 2017 at 12:13 pm

          Jacinda Ardern should be herself and not a clone of Helen Clark.

          • One Anonymous Bloke 2.1.1.1.1
            16 November 2017 at 2:56 pm

            Trying to appeal to your witless prejudice would be a mistake too.

            • Zorb6 2.1.1.1.1.1
              16 November 2017 at 6:38 pm

              We could swap you for one of the Manus Island refugees.NZ and PNG,would both be better off.

              • One Anonymous Bloke …
                16 November 2017 at 6:41 pm

                Flattering Bob Muldoon is the sincerest form of imitation you can grasp. All hail Plankton.

              • McFlock …
                16 November 2017 at 6:58 pm

                That doesn’t actually work, either as a logical proposition or as a joke.

                I think you might have mangled the Will Rogers phenomenon, which was used by Muldoon when he said that NZers emigrating to Australia “raised the IQ of both countries”.

                But making it a swap removes that possibility.

                You might argue that it’s the economic catechism about trade bettering both parties, but that can only work (even in theory) with substantially different products. The diversity between random individuals makes it equally likely that such a trade would be to the detriment of both nations, and more likely that one nation would benefit to the other’s detriment.

                And then there’s the entire thing about trading people…

      • red-blooded 2.1.2
        16 November 2017 at 10:02 am

        Who to you see us as being “soft” towards, Zorb6? Certainly not Australia. Are you afraid we’re being “soft’ towards refugees? ‘Cos I don’t see how offering to focus our intake (not increase it) on people suffering in our vicinity is “soft”.

        Of course, this government is also planning to increase our intake over time (not linked to this offer – a preexisting policy), but again, this is hardly “soft”. Our refugee intake is well overdue for a significant increase – we are not pulling our weight in the world.

        And, yes, we have a lot to address here in NZ. I look forward to your future comments commending the government on innovations in social housing, funding for education and health, regional infrastructure, environmental policy…etc. Another 150 people (many of whom may have a lot to offer their new country) is hardly going to break us, though – especially given that refugees are now being settled (and welcomed) in regional communities like Dunedin.

  3. DH 3
    16 November 2017 at 9:57 am

    “And third, developing a strong national value proposition – such as strong competitive advantage, key infrastructure and new technologies”

    I can only shake my head when I read this flannel. For a Govt to act in the nation’s interest, in this regard, requires a degree of favoritism towards domestic producers. These so-called ‘trade’ deals National and Labour have been signing are progressively removing the power of the state to engage in that favoritism.

    It all looks completely irrational to me. One hand signs trade deals to benefit the nation’s producers and at the same time the other hand signs investor deals to benefit the very parties we’re competing against.

    Look at our balance of payments for the year to June ’17;

    Goods Exports $50 billion
    Goods Imports $53 billion

    Dividends from NZ investment abroad $9 billion
    Dividends paid to foreign investors $17 billion

    Our trade deficit in goods is more than compensated for by tourism earnings which is well in the black. It’s the investment position causing all our troubles and (some) people want more foreign investment!

    • Ad 3.1
      16 November 2017 at 10:16 am

      That balance of payments figure is still weak, and quite uneven.

      I’m thinking about a whole post on trade policy but depends on time from work.

    • Draco T Bastard 3.2
      16 November 2017 at 11:41 am

      These so-called ‘trade’ deals National and Labour have been signing are progressively removing the power of the state to engage in that favoritism.

      It all looks completely irrational to me. One hand signs trade deals to benefit the nation’s producers and at the same time the other hand signs investor deals to benefit the very parties we’re competing against.

      And thus we see ever increasing amounts of poverty in this land of plenty.

    • gsays 3.3
      16 November 2017 at 3:14 pm

      Hi DH, do you know how much of those dividends paid overseas is to the Aussie banks?

      • DH 3.3.1
        16 November 2017 at 4:19 pm

        I don’t gsays, I just download the BoP spreadsheet from dept of stats (bopiip-jun17qtr-tables.xlsx) and try to make sense of it. It’s getting harder to read too, overly complicated with lots of new terms I don’t really know the meanings of.

    • Bondy 3.4
      16 November 2017 at 8:29 pm

      To digress from the conversation…and pick up on the balance of payments comment.
      I have spent quite a lot of time out and about on the roads of the upper South Island this year, including Kaikoura. When I saw the sheer numbers of large, new & expensive earth moving & geotechnical machinery, not to mention literally 1000’s of utes that have been imported for the road & rail rebuilds I wondered whether that would be a factor. Be interesting to see what happens when much of it gets exported again, and if that makes a difference. As you were.

  4. Siobhan 4
    16 November 2017 at 10:11 am

    “New Zealand’s total refugee population in 2014 was 1349, equivalent to about 0.3 refugees per 1000 people. That is five times fewer refugees per head of population than Australia”

    I’m not really sure that we are leading the way or setting any noble example to anyone on the refugee issue..

    http://www.stuff.co.nz/national/politics/71899378/How-New-Zealands-refugee-quota-stacks-up-internationally

  5. CLEANGREEN 5
    16 November 2017 at 10:20 am

    100% the DH no arguement there.

    We now pay 6 Billion Dollars (interest only) for that $76 Billion Dollars of foriegn bank money our Government (under national) that we are borrowing still, ; – and yet to pay it all back.

    Government ‘crown’ debt, we are emmassing is killing us so we would/should ammend the reserve bank act to print “emergency fundinng’ as most other countries did.

    The worry is that pushing more ‘tourism’ again places more cost onto our already overloaded “infrustructure” now!!!!!!!

    • Draco T Bastard 5.1
      16 November 2017 at 11:38 am

      Government ‘crown’ debt, we are emmassing is killing us so we would/should ammend the reserve bank act to print “emergency fundinng’ as most other countries did.

      The government should never borrow money – it should always simply create the money that it needs above what taxes it brings in. Taxes should then be adjusted so that the government deficit is about 3% of GDP (that will be the amount of development in the economy per year).

      That said, it’s not Crown debt that’s killing us but the massive amounts of private debt that is nearing 200% of GDP. The thirty percent of GDP of Crfown debt is nothing compared to that.

  6. Draco T Bastard 6
    16 November 2017 at 11:33 am

    Separately, the EU is discussing tightening restrictions on Chinese acquisitions of European firms.

    Not just the EU:

    International Business Machines Corp has urged lawmakers to use a different strategy than toughening foreign investment rules because of U.S. concerns about Chinese military actions and intellectual property theft, according to a letter seen by Reuters on Tuesday.

    You can see the importance of the WTO to solving trade disputes often in our favour, using agreed international rules, rather than simply being ignored or trade-retaliated by the larger powers, here:

    New Zealand won another such case against Indonesia only five days ago.

    Because forcing trade upon a nation that doesn’t want to trade is such a winning formula.

    I’ll say it again: The basis of free-trade is Willing Buyer, Willing Seller.

    If a nation is not willing to buy our goods then tough biccies for us. We should not be forcing them to. That is fully against the idea of free-trade.

  7. greywarshark 7
    16 November 2017 at 12:08 pm

    I put this up in OM 14/11:
    Mr Robertson told Morning Report New Zealand wasn’t giving up on the issue.
    “Obviously the issue is primarily in PNG’s court but there are people [on Manus Island] who have been declared refugees which means globally we’ve all got a responsibility for that and locally and regionally New Zealand takes that seriously.”
    http://www.radionz.co.nz/news/political/343664/robertson-we-can-help-in-manus

    Have they offered an air drop of water? It seems to be what is most need at present and you don’t want them having to drink their own. And reports say that even those who have been shifted out haven’t got finished facilities.

  8. Tanz 8
    16 November 2017 at 4:19 pm

    She is against what Kiwis want here. Big vote loser, so go for it, Ardern, piss of Australia and Kiwis, and see you drop in the polls, yet again. Such arrogance from a newbie PM.

    • One Anonymous Bloke 8.1
      16 November 2017 at 6:54 pm

      Hi there. It’s lovely that you’ve taken my sincere advice to keep expressing your bitterness and anger.

      You cannot imagine how persuasive it is. Don’t stop whatever you do.

  9. lloyd 9
    17 November 2017 at 11:18 pm

    Lets face it. Boat people are the ideal immigrants. They have paid their way to Australia, often at eye-watering prices, They are willing to live in miserable conditions and obey instructions from incompetent skippers. They have drive, motivation and are usually willing to do any job to get ahead.
    They have risked their lives to become Australians.
    If Australia rejects them NZ should take as many as we can. The social outcome for NZ will be Australia’s loss.

    Australia’s racist policies are disgusting, inhumane and comparable to those of Nazi Germany. Any Australian politician who suggests that the boat people shouldn’t be let into NZ because they could go back to Oz as New Zealanders should immediately be given NZ citizenship – NZ’s nuclear weapon so far only used accidentally upon Oz politicians