ANALYSIS: Amid the great power struggle in the Indo-Pacific, Prime Minister Jacinda Ardern reaffirmed what New Zealand believes the United States should be. Not a better security partner in a region that knows “assertion and aggression”, but a better economic partner.
It’s a message Ardern has sent the Biden administration before. But, in a speech at the US Business Summit in Auckland on Monday, and weeks before she was due to go to the United States, it was unambiguous: Embark on free trade because China has done it.
And the US supply has so far fallen short of expectations.
Ardern, in his speech, committed New Zealand to the recently announced and sketchy US “Indo-Pacific Economic Framework” – which amounts to something of a US-led free trade agreement, just without free trade, for a region that already has such a deal.
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“The manifestation of this may be slightly different than where our ultimate aspiration would be. But we have an opportunity here on the table that we want to work with,” Ardern said.
The ultimate goal remained for the United States to recommit to joining the regional free trade agreement, dubbed the CPTPP. As geopolitical tension has increased, countries like China and the UK have asked to join this agreement.
“We have our own business reasons for wanting this,” Ardern conceded, of the US involvement. “But the stakes are much higher.”
University of Victoria professor David Capie, director of the Center for Strategic Studies, said the “higher” stakes Ardern was referring to were the desire of countries in the region to see the United States engaged economically.
“What she’s saying is basically that a stable and peaceful region requires an engaged and present United States, including ones that offer an attractive economic vision for the region.
“The government wants to see that, and I’m sure that would be a message that the Prime Minister heard when she was in Singapore, as well as in Japan, and obviously the ideal form of that in the minds of the government is the CPTPP.”
Ardern’s speech included a brief account of post-World War II history and references to the General Agreement on Tariffs and Trade and the Bretton Woods Agreement, both of which rebuilt world economies after the war and established the dominance of the US dollar.
These being part of the post-war ‘rules and norms’ system which the government, among Western governments, says is existentially challenged by the rise of China and other pressures on the international system – pointed out that it included a more economically protectionist United States.
Van Jackson, a lecturer in international relations at the University of Victoria, said New Zealand’s preference would be to keep the existing economic order.
“You don’t want an American economic superpower to go rogue… You don’t want to be the recipient of tariffs, for whatever reason, at any given time. You want them to play by the same rules that you play by.
“A small power needs predictability and stability above all else, and the problem with the current moment for a country like New Zealand is that we are just full of unpredictability.
“There’s a sense of structural instability in the world right now… So it’s hard for a small nation to make its bets. And so the safest bet is the devil, you know, which is basically the liberal international order.
The United States’ Indo-Pacific Economic Framework, which the Biden administration has promised to launch “in early 2022,” has been touted as a “partnership” that countries in the region could join.
It would aim for “high level trade”, facilitating the digital economy and supply chain resilience – outcomes that are often part of free trade agreements.
Capie said the importance of the framework would lie in the details that have yet to be revealed, and that the “big question” was whether there would be a deal to be struck on market access. i.e. trade tariffs and quotas.
“All the signs so far are that there won’t be. While countries will welcome any opportunity to engage with the United States on trade and economic issues, and on things like digital services, for a bunch of countries in the region if there is no market access, then they’re going to say, ‘Where’s the beef?’”
Jackson, who served in the Defense Department during the Obama administration, said the framework was “not part of a grand plan,” but rather a bureaucratic response to the lack of a plan.
The concept of free trade has become politically unpopular in the United States, he said, because of the “oligarchic” levels of inequality that have accompanied globalization.
“The Biden administration didn’t know what to do with its economic rulemaking, even though America is still sort of the global economic hegemony,” Jackson said.
“It comes to a head in Asia, because Asia is the richest and most populous region in the world. American foreign policy elites decided 10 years ago that Asia was the future of America… And so they have to show that they are doing something strategic in Asia.”
On the security front, Ardern spoke positively of the AUKUS military pact, which will allow Australia to acquire nuclear-powered submarines from the United Kingdom and the United States, and of the Quad, a “dialogue of military security” between Australia, India, Japan, and the United States.
She said such security arrangements benefit New Zealand as long as they “continue to put the interests of our region at the heart of their hearts”.
The United States knows it needs to do ‘more’ in the Pacific, according to Biden’s ‘Asian czar’, national security adviser Kurt Campbell, who said so more than once during a speech at the top. But, while a diplomatic and development push was promised, trade was not mentioned.
In a question-and-answer session afterwards, Campbell said he would “decouple the trade from everything else.” He said everyone in the United States understood that an “affirmative” economic program in Asia was needed to compete with China.
“The problem is the domestic politics… the politics of that tend to go up and down, and we’re in for a tough time now. Hopefully it will come back in a way that will soon make things possible, which are not possible today,” he said.
It is not yet known whether Ardern will be able to deliver his message directly to Biden, as a visit to the White House has not been ruled out or ruled out. Ardern said preparations were still underway for the trip, which was due to take place at the end of May, and that it was a time of “intense” geopolitical problems. So Biden might be busy.
But the message is unlikely to be much different.
“The United States is first and foremost well aware of our position on the CPTPP,” she said after the speech.