Editorial by Selwyn Manning.
This week New Zealand’s Prime Minister Jacinda Ardern concluded her first bilateral with China’s two top leaders President Xi Jinping and Premier Li Keqiang and ended with clear signals the two countries are poised to build on the $30billion two-way trade relationship.
But there was more to this bilateral meeting than simply New Zealand – a comparatively small South Pacific economy – solidifying a progressive trade relationship with a global economic superpower. There were significant signals given by both state leaders involving multilateralism and a vision for a non-fossil-fuel future.
As Ardern said: “We also discussed our shared interest in strengthening the international rules-based order and on climate change, as an issue of global importance.” As such, both New Zealand and the People’s Republic of China indicated significant stances in foreign policy terms.
Firstly, the reference to “international rules-based order” appears a signal that New Zealand Government would support China in principle should it seek recourse through World Trade Organisation rules when countering any escalation of the United States/China trade war. The WTO, and other multilateral bodies such as the United Nations and the International Criminal Court, are central to New Zealand’s independent foreign policy. There’s consistency here. New Zealand simply cannot support the alternative, unilateralism, even when disestablishment threats against multilateral bodies are being pitched by New Zealand’s most significant security partner, the United States.
This is a diplomatic delicacy, a courageous statement, that Ardern was willing to deliver.
On numerous occasions this year United States’ President Donald Trump warned that his administration would abandon the WTO should it not reform and emerge with a trade-rules framework that embraces US trade interests. Trump’s threats also signalled how his Administration would track further toward isolationist-unilateralism should China object to any abuses to WTO rules and international trade law.
You can expect that the US Embassy was busy overnight filing its briefing to Washington DC.
Secondly, China included a gutsy clause in the NZ-China Joint Climate Change Statement that was issued by both Premier Li and Prime Minister Ardern after their meeting.
The PRC and NZ stated: “Both sides recognise the importance of the reform of fossil fuel subsidies, which will bring both economic and environmental benefits, thereby supporting their shared global commitment to sustainable development.”
The idea of abandoning fossil fuel subsidies was first advanced by Jacinda Ardern at her first APEC leaders’ summit shortly after becoming prime minister. There, at APEC, she argued on a panel consisting of herself and the vice chair of Exxon Mobil that fossil fuel subsidies ought to be abandoned – that governments should cease subsidising fossil fuel industries and channel their economies toward developing a future free of fossil fuel carbon emissions.
Clearly, the PRC heard her message and was ready to signal support for it as an ideal. This is a win for Ardern. It is also a respectful acknowledgement that the Asia Pacific’s economic superpower rates her as a significant leader on the global stage.
Additionally, the clause also indicates China – in a week where reliable PMI figures showed it in a very favourable space – that it is confident that its future lies less with the old technologies that assisted the development of today’s western economies and more with the new-tech solutions to global economic development.
The USA will be aware that this move signals that China sees itself as more advanced in the area of AI, machine learning, alternative energy transportation and development than its European and United States counterparts.
Ardern has demonstrated how important it is to meet with significant powers face to face. At such bilaterals, she can offer respect and determination while her counterparts observe her honest, trustworthy, progressive no-nonsense leadership in action.
New Zealand will be the beneficiary of this approach: Ardern said: “I also raised with President Xi the importance New Zealand places on upgrading and modernising our Free Trade Agreement with China – an ambition that he shared.”
Both states have agreed to progress our trade relationship well beyond the current record levels of two-way trade (currently at $30b per annum).
With Premier Li, Ardern said: “We discussed the FTA upgrade, and agreed to hold the next round of negotiations soon and to make joint efforts towards reaching an agreement as soon as possible.
“We also discussed China’s Belt and Road Initiative, noting that the Minister for Trade and Export Growth, David Parker, would lead a business delegation to the Belt and Road Forum in Beijing in April. This will help identify opportunities for mutually beneficial and transparent cooperation so we can complete a work plan as soon as possible.
“I reiterated to Premier Li that New Zealand welcomes all high quality foreign investment that will bring productive economic growth to our country.”
This latter point deserves some caution. China has expressed interest in furthering infrastructure investment within New Zealand – including investments that could be argued are contrary to New Zealand’s strategic interests, into the dairy and primary diversification sectors. While any New Zealand Government ought to proceed with caution here, if our diplomatic trade-negotiation team is buoyed by the country’s new leadership style, then perhaps mutual beneficial ventures can advance beyond a Joint Climate Change Statement.
PS: While in Beijing, the Prime Minister Jacinda Ardern also invited President Xi for a State visit to New Zealand as part of New Zealand’s hosting of APEC in 2021.