OPINION:
The facade that fronts Capitol Hill in Washington DC is cosmetically restored after the (depending on one’s media commentator of choice) — “insurrection”; “articulation of free speech”; “wannabe coup;” “legitimate protest” of January 6, 2021.
There are many bollards and barriers to navigate to get into the building. But New Zealanders are pretty good at working their way around impediments to gain access to places of import to our economic welfare.
That was certainly the case for a small delegation of trade and business advocates recently. I was there.
On the inside of the building, there are fractures that will take much longer to fix. Overt partisanship rages like a media-fuelled pandemic throughout the institution.
While normal business and effective collaboration runs its course, as has always been the case, there is a sense it has been driven underground and must hide in plain sight.
Why? No good will come of an elected representative being seen to stretch a hand across the aisle.
Apparently, that is a sign of weakness when once it was seen as an articulation of strength and maturity.
When talking about trade and Congressional dynamics, one politician described observing some of his more Twittering colleagues in the seats opposite as like “watching a fistful of ferrets fighting in a phone box”. He was trying to provide some light relief, but he was not joking. There were distinct elements of resignation and frustration in his voice.
Unfortunately, the emergence of trade as one of the most divisive issues in mainstream US politics has presented ongoing challenges to New Zealand’s excellent teams of advocates and negotiators. Those who seek to support rules-based systems and to secure access for our goods and services through trade agreements.
There is no doubt that US politics has become more tribal, inwards-looking and soundbite-driven. It is a challenge for those who consistently go in to bat for us.
The common perspective is that, on trade, there are three rules in play in Washington DC at present.
Rule number one: it must be made or manufactured in the US. Rule number two: it should, maybe, have a sustainability component integrated (unless that contravenes rule one). Rule number three: there should be consideration of international perspectives (unless that contravenes rules one and two).
It is fair to say traditional policy paradigms have been severely interrupted. The World Trade Organisation is largely viewed as a multilateral misadventure which failed to live up to promises that people can barely remember and certainly don’t want to talk about. Few people like multilateralism anyway. It has dangerous elements of actual compromise and co-operation that are far more suited to yesteryear.
Plurilateralism is hardly held in better regard. Obama missed an opportunity to pass the substantive agreement that is the Trans-Pacific Partnership (with or without extra letters added) when it could have been done. He had a window to act but demurred and the window banged shut with a vengeance when Trump arrived in the White House.
Comprehensive bilateral free-trade agreements involve trade-offs that are unlikely to emerge unscathed from any current Congressional debate. Oil State? Farming State? Poor State? Worried about immigration State? Swing States or State of disrepair. It would be an unusual free trade agreement that could navigate that maze of domestic push-points at any time in the foreseeable future.
There is a pervasive apprehension that focusing on external linkages which have supported development, geopolitical change, the solidifying of allegiances and incredible consumer choice, are in some ways antithetical to electoral success. So, little is said at all.
The situation is complicated by two particularly relevant issues which loom large in the corner of the room. The first is climate change. Fights over cause and consequence will be ongoing but when people in Texas are being admitted to hospital because of burns on their feet from hot pavements and raging wildfires compete with floods and unseasonal snow for media headlines, the politics of insularity can’t be sustained.
The second is China. Not one person in a broad-ranging series of discussions with members of Congress, officials, commentators, and diplomats, failed to mention China. A fully fledged — no longer emerging — rival for global economic dominance, geopolitical reach and international profile. It’s conflicting for people to have to accept that, in looking more inwards, someone else has and is moving into the vacated spaces. We heard that China must be managed and that people in the Indo-Pacific should be wary of engaging “too much”. Notwithstanding the symbiotic relationship between the US and China, the level of unease was palpable everywhere.
This is partly why negotiations on an Indo-Pacific Economic Framework (IPEF) are important. It isn’t a trade agreement per se. But it wraps in countries around the Indo-Pacific and deals with important issues fundamental to trade such as supply chain security, sustainability considerations that go far beyond greenwashing and, potentially, issues to do with emerging technologies that need to be addressed. Security of investments, anti-corruption considerations and capacity building are all part of the conversation. Importantly, it is a theatre of relationship maintenance that must be supported.
Might it be a foundation for a more substantial trade agreement with actual reductions in tariffs and non-trade barriers in due course? Not sure. But it’s the sole horse in its category in the race and even an inept gambler would back the only animal in the starting gate.
So, where does all that leave New Zealand? Funnily enough, we’re in a pretty good space with our third-biggest trading partner, long-time ally, and — for the most part — mate.
In an ideal world, we’d be able to address some of the red-tape, unnecessary costs or time and money-wasting issues that incommode the biggest exporters who prop up our economy.
That’s still a major goal for many.
But we’re an increasingly diverse economy. We’re aerospace. We’re technology. And films and gaming and coding. We’re sustainability innovators. Service providers — we’ve got legions of competitive, credible people We have the best airline in the world, flying more often and more directly to the States all the time. We’re the makers of niche products and fast-moving consumer goods.
We’re tenacious innovators and Americans admire that.
Entrepreneurs are talking to venture capitalists. Venture capitalists are talking to investors. The US is our third-biggest market. It’s healthy, it’s growing and it still had huge potential.
That’s why, underneath the noise, there is a level of positivity, which is constructive.
When a particularly didactic Fox News personality is interrupted by a charming advertisement for Kim Crawford wines, New Zealand is doing something right.
● Penny Tucker is a former diplomat, free-trade advocate and current executive director of the NZUS Council.
Where the Deloitte Top 200 Young Executive winners have ended up.