Last month it was Latin America that John Key, global diplomat was taking by storm. The embedded media entourage showed him kicking a soccer ball in Brazil – swapping whisky and wine with Chile’s billionaire President Pinera – waving his sombrero at the prospect of a free trade deal with that bastion of freedom, Colombia, some time in the (hopefully indefinite) future.
Few of the accompanying journos provided an in-depth analysis of Key’s ‘own goal’. His official meetings with Latin America’s leaders had been rescheduled so they could attend the funeral of Venezuelan President Hugo Chavez. Key could have gone too, but chose to stay away – presumably to avoid offending the more important ally in Washington DC. For all the hype back here about the PM’s triumphant tour, the lasting message to Latin American leaders was that New Zealand’s priorities lay elsewhere.
Our great leader is now wooing this month’s new best friend, China. Expect more photo ops and bland blogging from journalists traveling with the PM. That’s why he has taken them with him. The blah has already started. We heard how Key, fresh off the plane, was embraced warmly by his Australian counterpart Julie Gillard. Such warmth is hardly surprising. The beleaguered Gillard can use any friends she can find at present.
This is early days for the China trip, so let’s hope we have some deeper engagement with the foreign policy issues on this visit than we did for Latin America, because they are crucial. One focus, at least, should be the brewing conflict between the US-led Trans-Pacific Partnership Agreement (TPPA) and the China and Asean-led Regional Comprehensive Economic Partnership (RCEP). New Zealand is a party to both.
Our government has a Janus-faced approach to this tension. On one hand, Trade Minister Tim Groser said ‘if we in New Zealand smell or sense that this is an anti-China thing we would leave TPP’. During the 2012 US election Republican candidate Mitt Romney said Obama hadn’t been tough enough with China, and endorsed the TPPA as a ‘dramatic geopolitical and economic bulwark against China’. Obama responded in one of the presidential debates that ‘we’re organizing trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards. That’s the kind of leadership we’ve shown in the region. That’s the kind of leadership that we’ll continue to show.’
Both Obama and Romney reinforced the strategy set out by Secretary of State Clinton in November 2011: a two-pronged move to secure America’s Pacific Century through first, realigning US military presence from Iraq and Afghanistan into Asia, and second, the economic pivot of the Trans-Pacific Partnership Agreement. The explicit goal was to neutralise China.
Of course, New Zealand hasn’t walked away from the TPPA.
The current goal is to close off the 11-country TPPA at the APEC leaders’ meeting in October. That won’t happen, although intense political pressure could get them quite near. By then Japan will have come on board and the talks will become more complicated.
There are rumours the US might be prepared to sacrifice the time line to bring more Asian countries into the TPPA, presumably to intensify the pressure on China. But despite public urging from US, South Korea has said it won’t seek to join the TPPA talks at this stage because its focus is on a bilateral negotiation with China and a three-way deal with China and Japan.
Assuming the TPPA doesn’t conclude at APEC in Bali in October more meetings will be required, especially at the level of trade ministers and even political leaders. In recent years these have occurred at the margins of APEC, when the minister and leaders are all in one place. But in 2013 China is chairing APEC. Are the APEC members involved in the TPPA planning to have side meetings in China, rubbing the hosts’ nose in a US-led deal that is so overtly hostile?
Which brings us to the parallel world of the RCEP. New Zealand along with Australia, the Asean countries, Japan, India and South Korea are about to start negotiating a mega-agreement that pivots around China. Six of them (Singapore, Malaysia, Vietnam, Japan, Australia and New Zealand) will also be negotiating the TPPA.
With different strategic and foreign policy drivers, and very different economic models, how can the TPPA and RCEP be reconciled? Tim Groser’s happy image has them all ultimately docking together into one grand regional APEC free trade agreement. I don’t think so.
Where does that leave countries like New Zealand that are straddling the two? According to Key in November 2012: ‘Our basic proposition is we welcome the RCEP talks but TPP is the big game for us at the moment’. Will he be telling that to China’s President Xi and Premier Li when he meets them this week?
Which brings me back to the China tour. Coverage to date suggests the Bo’ao conference is the first stop by the PM, several Chinese-New Zealand MPs and a corporate entourage in a trade mission to China.
This line rests on three assumptions: first, that our export interests should, and do, drive our relations with China; second, that trade is politically neutral, so we can play with everyone in the world; and third, that we can sign politically motivated deals with major powers who are in conflict with each other, without having to take sides.
In reality, so-called ‘trade’ negotiations have become proxies through which a new competitive imperialism is being pursued. In the 1990s competitive imperialism described the race between the US and European Union to extend their hegemony. Today, it involves a new cold war between the US and China.
Given the ascendancy of Asia, and China in particular, what position New Zealand takes and how we maintain our independence, is crucially important. These are matters of foreign policy, not isolated commercial issues.
We should not assume that China is sitting passively and contented as the US strategy plays out through the TPPA. China’s own priorities are clear from the order in which it has listed the dignitaries attending the Bo’ao conference. According to the Australian Financial Times, Brunei, Kazakhstan, Myanmar, Zambia, Mexico and Cambodia are higher up the list than Gillard at number 11 – she is even outranked by John Key.
The media would serve us well by interrogating Key about these deeper foreign policy issues. Hopefully he can perform better than at his post-Cabinet press conference last week. According to the Scoop transcript, when asked if was he was concerned about Japan joining the TPPA, Key replied that ‘China did not actually get a voice on the TPPA’.
As with Latin America, these questions that deserve more attention than Key’s smiles and waves, or even than the fallout from the recent calamities in China involving Fonterra and Zespri.