Navigating the New World (Dis)order in Turbulent Times – David Parker

Special thanks to Diplosphere for helping organise this event.

Tena kotou katoa.

Mexican poet Homero Aridjis wrote “There are centuries in which nothing happens and years in which centuries pass”. It sure feels like this now.

Large swathes of the 80-year-old rules-based world order developed after World War 2 are in tatters.

The dramatic withdrawal of the United States of America from the Paris agreement, the World Health Organisation, and the halting of most USAID programmes are, to say the least, significant. The ineffective and stalled OECD work on the minimum taxation of multinational corporations. The whirl wind of tariffs and counter tariffs, which change almost daily.

The war of words between neighbours in North America is unprecedented.

The speed of the recent withdrawal of US support for institutions the US was itself pivotal in creating has shocked many.

Europe, already reeling from the war in Ukraine and wider instability, is now deeply unsettled by recent statements and positions from the new USA administration.

The withdrawal of the US security guarantee changed not just Europe but geopolitics everywhere including Asia and the Pacific.

Tectonic shifts are rocking the world, which is markedly different from a decade ago.

Multilateral institutions have diminished in authority and effect. The slide of the United Nations, and other important institutions like the World Trade Organisation, is obvious.

The overuse of the UN Security council veto and inconsistent application of international law has undermined the United Nations. UN ineffectiveness feeds a cynicism and emboldens disregard for international laws, treaties and institutions. The UN Secretary General was declared persona non grata in Israel.

Many countries we identify with – like Canadian and European democracies – which relied on security alliances with one great power are obviously rethinking their strategy.

In stark contrast, the New Zealand government has spent the last 18 months seeking closer alignment to the US, increasingly positioning New Zealand as being in opposition to China. We did not consider this a wise approach, but in any case the shifting global landscape has rendered it unsound.

The world is in a transition to a multipolar world, with heightened rivalry between the great powers.

We could be in for a rough ride. What would what a Labour government do if we held the reins?

How should New Zealand navigate the new order?

When should we speak out?

When should we stay silent so as not to provoke a response?

I’ll set out my thoughts on New Zealand’s foreign affairs, trade and defence responses. How Labour would steer New Zealand’s independent foreign policy efforts, both transactionally and more holistically.

You will have seen that we share common views with the government about the likes of the Cook Islands, the militarisation of the Pacific, and on Ukraine, but that we differ strongly on AUKUS and Gaza.

This should not surprise given Labour’s record, which we are proud to stand by.

The Labour-led government stayed out of the illegal invasion of Iraq after the UN inspector Hans Blix found no evidence of weapons of mass destruction. National  said New Zealand should have joined that war, which made the Middle East less secure, and undermined the rules-based order.

An earlier Labour government established New Zealand’s nuclear free status, which National also opposed.

Labour sent peacekeeping and reconstruction forces to Timor-Leste and Afghanistan. We provided money for arms to Ukraine via the NATO fund, humanitarian aid, air transport in Europe, and New Zealand personnel to help train Ukrainian soldiers in the UK.

These are examples of the New Zealand Labour Party in government applying our independent foreign policy, making decisions according to our assessment of New Zealand’s long-term national interest.

New Zealand is not non-aligned and works most closely with like-minded countries which share our values.

Australia is by far our most important relationship.

We are internationalists, not isolationists, and a reliable supporter of international institutions.

We understand communication between nations on sensitive issues benefits from diplomacy, whether via the United Nations, other multilateral fora, or bilaterally.

We must be able to talk about differences between our country and others. Hegemony is taken too far if we cannot.

Not all statements can be in public, but some should be.

Sometimes, as now, there is a desire not to offend for fear of retaliation. At times of sensitivity, the wisdom of former Prime Ministers on both sides of the Tasman can be helpful. They can say what needs to be said.

Paul Keating is well known for his pithy comments. He recently described the fairer  attributes of Australian society compared with US societal settings. He listed cradle to the grave healthcare for everyone, sustainable retirement savings and superannuation, an Australian economy which delivers substantial income increases for working people, high rates of Australian participation in education, and effective gun control.

Keating’s purpose was to emphasise that we shouldn’t be subservient, nor cede moral authority, to others including the US when choosing our approach to the world.

Malcolm Turnbull has spoken out against US tariffs noting their random use against Australia is not justified by a trade imbalance.

John Key has quietly but importantly emphasised that we should be careful not to ruin our relationship with China.

Helen Clark described the pitfalls of AUKUS pillar 2 and has been critical of loose language resurrecting the defunct ANZUS pact or using the Five Eyes intelligence network as a foreign affairs construct.

She put it succinctly and well – “New Zealand needs a clear-eyed vision for courteous relations with the US and China, close dialogue with the Pacific Rim, Pacific Island and European friends”.

Just because great-power politics have shifted does not mean Aotearoa should drop our long-standing commitment to human rights, open trade, multilateral institutions and the rights of small states.

Obviously we understand diplomacy is required, but that should not silence our ability to speak up and advocate for what we believe in.

We raise concerns about freedom of expression and the treatment of minorities in China, and about foreign interference. Some of this is said behind closed doors. Some is very public.

When the Chinese government via its NZ embassy criticised New Zealand media for reports alleging foreign interference, in Labour we quickly and publicly stood up for the rights of New Zealand media and criticised the Chinese intervention.

The New Zealand Labour Party’s view is that if we don’t stand up for what we believe in, we undermine our ability to do so in the future. We also undermine our reputation for fairness in foreign affairs, built up over decades, which in turn undermines our influence.

The same principle applies to our relationship with the US.

We have acknowledged the current government’s desire not to unnecessarily provoke a response from the US when things are so volatile.

But the government’s seeming unwillingness to criticise anything pertaining to the US concerns us, even when the US went so far as to sanction others for participating in international institutions we support.

For example, New Zealand is a member of the International Criminal Court. The US is not. That is their right, but for the US to sanction those assisting the ICC is wrong. Yet the current New Zealand government chose not to stand with 69 other countries including Switzerland, France, Canada, UK, Germany, Sweden – countries we share values with. This was an unfortunate break with NZs proud tradition of independently standing for what we believe in.

If we want countries to support the international rule of law, we should apply it consistently. Many countries think the west is inconsistent in its application of international law in the middle east.

The sympathy most New Zealanders felt for Israel and those who settled there following the holocaust has severely eroded. We condemned the killings and hostage taking by Hamas on 7 October 2023. But 70 years after the 1967 war, the blatant lack of rights of Palestinian people, the endless death and carnage in Gaza, and lack of progress towards a two State solution, or a single state alternative, is intolerable.

This is why we have said New Zealand should be assisting the International Court of Justice when considering whether the state of Israel is acting illegally, as we did in respect of Rwanda and Ukraine. And be clear that individuals in breach of international law should face consequences in the International Criminal Court, and via a New Zealand sanctions regime.

We have limited power and can’t always get our way. We try to use our values and reputation to influence better outcomes.

We get the realpolitik of superpower.

We are long term observers of superpower behaviour.  We are not surprised that China has become more assertive as it has becomes a superpower. The UK used to be, so were France, and Spain, and Italy back in the day.

The USA has long used its power in central America, and beyond, to influence outcomes, and is currently pressuring Panama to limit Chinese influence.

Russia’s Mr Putin has a history of invading and destabilising other countries. He is unlikely to stop, in part because his internal political position – including his life and retention of his billions – may rely upon his continued international aggression. This is why we support consideration by the New Zealand government of support for multinational peacekeeping efforts in the Ukraine.

 

AUKUS pillar 2.

The New Zealand Labour Party does not support joining AUKUS pillar 2, which the prior US administration described as a China containment strategy. There was a change of language from the New Zealand government after the 2023 election. New Zealand was described as a “force multiplier” for the US. The government said there were strong reasons in favour of pillar 2. Long redundant ANZUS language was resurrected. It appeared to us in Labour that the public were being softened up to join.

We engaged the public in a debate. This included well-attended public meetings. Voices for and against AUKUS pillar 2 were active. The media delved into the issue.

Neither interoperability nor access to technology rely upon AUKUS – two of the arguments put in its favour. Cooperation with other countries in Asia like Japan, Indonesia, Singapore, South Korea does not rely upon AUKUS and could be hindered if these countries do not like the anti-China AUKUS positioning.

We concluded that AUKUS pillar 2 is not in New Zealand’s interests. Our decision was not influenced by the election of the new US administration, although for some this will be relevant.

It is pleasing that senior former National and Act politicians have voiced their opposition too.

Interestingly, the rhetoric from the government has toned down on AUKUS. That said, language in India last week, instead of emphasising the need to navigate a multi-polar world, clumsily positioned New Zealand as making binary choices between India and China.

Being unsurprised that a rising China is more assertive in its nearby region does not mean we are comfortable with all steps in the Pacific.

Being situated at the bottom of the Pacific Ocean distant from neighbours has trade and other disadvantages. But that physical isolation and low levels of militarisation in the vast Pacific are our greatest defensive attributes. Changes to that status quo concern us.

We are perturbed by the recent agreements signed between the Cook Islands and China, labelled as a Comprehensive Strategic Partnership. The agreement commits the Cook Islands to supporting China in multilateral forums and to support candidates during elections of various boards and committees.

We agree with the current New Zealand government that the process which preceded these commitments, and their substance, breach the arrangements under which the Cook Islands operate, which are referenced in the Joint Centenary Declaration of 2001.

The Cook Islands are part of the realm of New Zealand. Cook Islanders carry New Zealand passports. The advantages this carries are the primary reason Cook Islands per capita GDP is a remarkable four times that of Fiji and five times that of Tonga and Samoa. Advantages include the ability to work in New Zealand and Australia, access to New Zealand health care and education, and superannuation portability.

Consultation obligations are not some perfunctory commitment of little importance. They are to ensure the Cook Islands government neither deliberately nor unwittingly takes foreign affairs steps deleterious to the Cook Islands, or to New Zealand, and to our relationship.

It is of course open to Cook Islanders to change their relationship with New Zealand and give up their New Zealand Passports. I doubt this will occur as Cook Islanders know their standard of living would slump if they did so. Security issues for the Cook Islands could deteriorate over time too.

In terms of seabed mining, it is within the sovereign power of the Cook Islands to pursue this if their government desires. New Zealand’s experience with hundreds of millions of dollars of clean-up costs left behind by overseas oil companies makes us very wary. Nevertheless, if the Cook Islands so wish, New Zealand should assist them to manage the opportunities and risks, including with international participants.

The prosperity and peacefulness of the Pacific Islands is of fundamental importance to New Zealand. The withdrawal of USAID does not help.

New Zealand, with partners like Australia, must step up. We need to do more to help Pacific countries with affordable banking services, digital telecommunications, renewable electricity, sustainable resource utilisation (especially helping to maximise value from EEZ fisheries), and climate adaptation.  Better educational, health and civil society outcomes are good for us all. Labour mobility can also help, although care is needed given sensitivities for some concerned about depopulation,

New Zealand can help Pacific populations displaced by sea levels rise.

Reciprocity is key to prosperity and the desired avoidance of militarisation in our region. What would we do next?

Labour would like to discuss a Pacific Peace Zone with other Pacific Island countries, and surrounding superpowers. Hon. Phil Twyford will detail how this meshes with our historic commitments to denuclearisation and peace on another day.

We are continuing to work on our Pacific priorities within Labour, but one thing is already clear. The decline in New Zealand government spending on soft and hard power must be reversed.

The split between hard power expenditure on military personnel and hardware, and soft power spending in development assistance and diplomacy will need to be worked through. But in our view increases to both are needed. A good principle to start with would be that every extra dollar spent on our military will be matched with an equivalent lift in our aid to the Pacific.

Today is not the day to detail a defence procurement plan, but some high-level statements are appropriate. I make three points:

1. In coalition with others, Labour recently replaced the Orions with P8s and replaced the Hercules. An earlier Labour government bought the current frigates, which are now nearing end of life. While we will never be a substantial military power, we need naval vessels to respond to disasters in the Pacific, and it is reasonable for our partners to expect they will have military capabilities. Rt Hon Chris Hipkins has acknowledged this requires cooperation across governments and election cycles.

2. Our most effective fighting force is our SAS. They should be well paid and well equipped. They like to deploy to polish their renowned skills. Consideration should be given to their deployment in Ukraine in support of peace.

3. The war in Ukraine has proven quantities of small drones are important. Ukrainian drones have effectively controlled the Black Sea against an invading nuclear power. They are affordable. We are home to Rocket Lab, Hamilton Jet, and drone companies delivering leading edge services to our world leading agricultural sector.

Australia has drone capabilities and is ahead of us in some areas. To use Sam Roggevin’s analogy in his book the Echidna Strategy, in defence we want to be a prickly adversary. New Zealand should prioritise working with Australia on defensive marine and air drones and commit significant resources to the task. Our defence spokesperson Hon. Peeni Henare is engaged in these issues.

Now I turn to trade. A lack of cooperation and compromise has blocked progress at the WTO for many years.

This is not a dig at the US.  Many US complaints about trade imbalances caused by existing tariffs, non-trade barriers, state subsidised overcapacity and dumping are valid.

That said, other distortions and unfairness caused by tax arbitrage substantially benefit the USA, especially in services like e-commerce. So does the US dollar reserve currency status, which in effect outsources much of the cost of US government deficits and debt.

Clearly these are complex issues.

As Trade Minister during the last Trump administration, I had frequent dealings with then US Trade Representative Robert Lighthizer. He criticised private equity purchasers of US manufacturing outsourcing manufacturing to low cost-labour countries to shave off the last few percent of labour costs. Those owners banked increases in capital values at the cost of the US workers. He wrote about this in his book.

He understood that the standard of living of working middle class citizens were essential underpinnings of both the long-term health of the US economy and democracy. Without a strong middle class working, producing, saving and consuming, the economy and society weakens.

There are ironies.

The system has worked for the US in terms of its GDP per capita, which is amongst the highest in the world. The factors referred to by Paul Keating, together with the parallel concentration of wealth at the very top, are not primarily caused by other countries, but rather by the USA’s internal settings.

Unfairnesses in trade settings are not new for New Zealand.

New Zealand and Australia both play much fairer in global trade than most other countries but are still caught up in the maelstrom.

Sitting as we do at the bottom of the Pacific, New Zealand responded to protectionist measures in Europe and the Americas by building trade and foreign affairs relationships in Asia. Some of those strategies have been phenomenally successful for a little country – the China FTA, AANZFATA, CPTPP – which includes Japan, Canada, Mexico and Chile. Then we circled back to the UK and Europe. The current government has closed the Gulf deal and is pursuing India. Labour’s record in trade is second to none.

How do we protect our trade interests now?

We are as well placed as any distant small country can be. Our diversity of sales channels will help us minimise the first-round effects of the trade war. Risks to compliance with trade agreements and the second-round effects in terms of the risks of an international economic slowdown are impossible to model.  I certainly do not recommend tit for tat tariffs.

Where might a new order emerge?  I will mention one new idea Damien O’Connor and I have discussed. It is at least possible that some of the barriers to trade between Europe and the US will soon be reduced for both security and economic reasons. What happens then? Maybe CPTPP could then be a sensible choice for Europe. The UK is already in it. If this happened, CPTPP – which is has overtaken the stagnant WTO – could become the de facto international standard. This possibility should be pursued by our excellent trade officials.

I want to end by lifting our thoughts to the underlying drivers of the polarisation afflicting the world.

Polarisation has increased between and within countries. There are many causes. Some are geopolitical, some economic, and some technological – like the role social media plays in carrying lies, misinformation, violence and death threats without consequence for those lying or those profiting from them.

People feel less secure. Whatever the causes, this has political, economic, social and security implications.

Many foreign affairs responses are transactional. But the big shifts post-World War 2 were holistic.

There was broad acceptance that the extremes of fascism, revolution and wars had been caused by depressions and inequality, in turn partly caused by unaffordable reparations.

The new world order after WW2 was intended to enable countries to succeed by encouraging international trade, access to resources, better health, and international cooperation.

The decades that followed saw enormous progress in most parts of the world, with complimentary progressive measures within countries assisting to lift outcomes for billions of people.

Now the underlying consensus has frayed to the point of disfunction.

I believe the current turmoil will need a holistic response, and for that to be agreed a substantial subset of the international community will need to find common ground about the main underlying causes of the current worrisome trends.

I’ve reached the stage of career that I know what I believe to be important.

For me there are two main themes.

The first I have already touched on is gross wealth inequality, especially when this becomes intergenerational and sections of the population stagnate. This drives instability. I won’t say more about that in this speech, but history shows time and again that gross inequality ends in tears.

The second is the breakdown in trust which happens when lies and misinformation prevail over facts. A cornerstone of the emergence of the nation state and the spread of liberal democracy was the enlightenment. There are rational facts. There are truths and untruths.

The scourge of irresponsible social media, megalomaniacal tax avoiding tech barons, and irresponsible internet service providers is on my list of the important.

I have a view that we in the west have made a fundamental error in providing what is in effect an exclusion of liability for third party content.

We have wrongly taken upon the shoulders of government the burden of regulating against what is harmful. I doubt this will ever work in practice. It also puts the burden on the harmed citizen (or government agencies) to respond after harm is caused.

The exclusion of liability was conferred when providers were more akin to the postal service, which has no liability for the content of a letter. Those providers morphed into publishers yet are protected from the legal remedies which apply to the traditional media they undermine. This mistake is the core of the problem.

I am convinced it is better to remove the exclusion of liability, exposing those selling a harmful product to liability to the ordinary people that their product harms.

And it is a harmful product.

Be it damage to young people, foreign interference, defamation, theft of other people’s content, the enabling of small but extreme groups of evildoers who find each other on-line, online sexual abuse, online streaming of terrorism, or the regular unpunished threats of death and injury. Lies and misinformation abound.

A senior banker recently complained to me that internet investment scams are more common than legitimate products, and that the internet companies refuse to control them. Worse, they take money for the advertising service they provide to the fraudsters.

Much of this is harm is from anonymous sources, with some deliberately aimed at undermining our democratic way of life and freedoms.

Enabling private remedies for our citizens against those profiting from selling these harmful products, including through low-cost fora such as disputes tribunals or small claims courts, seems to me to be proper. Leave it to the Courts to work out the balance between freedom of expression and the duty not to sell a harmful product.

There are ways to introduce safeguards, such as liability limits or safe harbours for media content or maybe for platforms that take active steps to prevent scams. But allowing the current situation to continue – where the burden falls almost entirely on individuals while social media giants profit – is untenable.

The suggested approach does not make the government a censor and better avoids the risk of state suppression of freedom of speech.

Left unchecked, current ills will be made worse by those malevolently using AI to make the harms they are already causing worse.

Left unchecked the oligarch owners of these platforms will increasingly use them for the own political ends, as we already see with some platforms.

Fixing this would not ruin the internet. Point to point communications would still be protected like the mail. E-commerce would endure. Massive quantities of information will remain.

I fear that if this is not addressed, polarisation and demagoguery will prevail.

I am by nature an optimist. Opportunities arise from adversity. Digital services taxes sprouted at the end of the last Trump presidency, and I predict pressure for change will continue to mount.

Many people in the world are fed up with these selfish tech giants. We should work with other countries to fix this.

The holistic changes after World War 2 had the betterment of people at their heart.

New Zealand under Labour Prime Minister Peter Fraser helped ensure the United Nations applied a human rights approach, for the benefit of people in countries large and small.

New Zealand needs a clear-eyed vision for courteous relations with the US and China, close dialogue with the Pacific Rim, Pacific Island and European friends.

Everyone in this room has a role to play. It has never been more important to stand up for New Zealand’s independent foreign policy. And we all should.