With the election over and coalition deals ceremonially signed, Prime Minister-designate Jacinda Ardern and her incoming government must begin to navigate the possible pitfalls of an uncertain global climate.
North Korea, Donald Trump, and tackling trade negotiations are among the challenges Ardern and her team must face – so what changes can we expect after nine years of National leading on the world stage?
Strikingly, it will be junior coalition partner New Zealand First rather than Labour largely tasked with setting forth the country’s position.
The coalition agreement between the two parties allocates three international affairs positions to New Zealand First: foreign affairs, defence, and an undersecretary for foreign affairs.
David Capie, the director of Victoria University’s Centre for Strategic Studies, said it was “a surprise” to see New Zealand First hold three foreign-focused spots – although he suggested Ardern’s foreign policy views could hold more weight.
“That’s striking [the number of positions] but it’s also worth remembering that in practice New Zealand’s international interests are pressed primarily by the Prime Minister.
“That was certainly the case the last time [Winston] Peters was Foreign Minister and Helen Clark was PM.”
Peters, Mark set for big roles
As for the people who will fill those roles, Peters is expected to be confirmed as Foreign Minister on Wednesday, although he was coy when asked at the signing ceremony for the agreement.
Ron Mark, a former soldier, seems certain to become Defence Minister, while the undersecretary role could fall to either Fletcher Tabuteau or Shane Jones (although the latter would be highly disappointed not to pick up a Cabinet position).
Peters served as Foreign Minister from 2005 to 2008 under the last Labour government, and is widely regarded to have performed well in the role while securing welcome funding for MFAT.
He has already secured a minor victory, with Labour agreeing to record a Cabinet minute about the “lack of process followed” before the National government’s sponsorship of a UN Security Council resolution condemning Israel over its settlements.
Labour supported the resolution at the time, and Ardern said the Cabinet minute would refer to only the decision not to bring the matter before Cabinet for sign-off.
“Our view is for significant issues, of course you would and should under normal circumstances involve the executive in that decision.”
Mark has been outspoken about a perceived lack of investment in the Defence Force, and New Zealand First has secured a commitment to re-examine the previous government’s procurement programme “within the context of the 2016 Defence Capability Plan budget”.
Peters said there had been “so much in the recent history of procurement which is highly suspect”, and his party wanted to review whether it could get better results for the same amount of money.
Capie said re-examining the procurement process would “buy the incoming government some time to think through the big-ticket items that were foreshadowed in the last White Paper”.
“That involves billions in new defence spending, never likely to be decisions a new government would rush to make straight after an election fought around issues like child poverty and homelessness.”
Clock ticking on TPP
Trade is perhaps the most pressing issue for the new government, with just over a fortnight until the TPP trade deal is meant to be finalised on the sidelines of Apec in Vietnam.
Ardern confirmed the Government would push ahead with a ban on the purchase of existing houses by non-resident foreigners – a policy which would require a renegotiation of the TPP, along with the existing South Korea trade deal.
Ardern said Labour and New Zealand First had “a huge amount of consensus” when it came to the TPP, particularly over the foreign buyers ban and concerns about the Investor State Dispute Settlement (ISDS) mechanism, and would enter negotiations with that stance in mind.
However, she would not comment on whether New Zealand would pull out of the deal if it could not win concessions from the other TPP partners, saying she did not want to compromise the Government’s negotiating position.
Stephen Jacobi, executive director of the NZ International Business Forum, said he was hopeful New Zealand could sign off on the TPP, depending on how the Government chose to deal with the foreign buyers ban and the ISDS concerns.
Ardern had been “suitably discreet” about the Government’s negotiating plans, while the TPP itself was not mentioned in the coalition agreement.
Jacobi said there was “plenty of scope” to stop foreign buyers without a legislated ban, such as through a stamp duty. While Peters dismissed the idea of a stamp duty on Tuesday, saying it had not succeeded in Vancouver, Jacobi argued it had “worked wonders in Singapore”.
Winning changes to the ISDS clause would be difficult, he said.
“It’s about the strength of their resolve isn’t it – how far they want to go?”
Jacobi said he was “a bit puzzled” by the inclusion of a coalition agreement clause to work towards an FTA with the Russia-Belarus-Kazakhstan Customs Union.
Peters said he wanted to explore why the previous government had scrapped its free trade talks with Russia and try to get a deal across the line.
“Here comes a glorious opportunity to put ourselves into a trading market with Belarus and Kazakhstan and Russia, and give ourselves an opportunity to enter the second-biggest dairy and beef importer in the world.”
Turning inward, or looking outward?
More broadly, the new Government may bring with it a change of approach to the outside world, with both Peters and Ardern having expressed reservations about globalisation in the past.
Outgoing Prime Minister Bill English expressed some concerns about a potential change of tack, suggesting New Zealand’s foreign affairs and defence ministers presented “the face of New Zealand to the world” with the Prime Minister.
“New Zealand has been able to represent itself for the last decade as an outward-looking, globally competitive economy that’s succeeded where other countries have failed or have found it hard…
“Now there’s spokesmanships there that have gone to a party that has quite a different view, that is it’s pretty hostile about the global economy, it is trying to constrain significantly the people and investment that come across our border.”
English said it was important that New Zealand was represented as “an open, confident economy and not in the way that it was represented by the Deputy Prime Minister last night in his speech, which was a country that’s now scared of what might happen to it.”
However, Ardern provided what Jacobi described as “balancing language” when she insisted she and Peters were committed to free trade despite their concerns about the TPP.
“At the same time, we both support increasing exports and export growth for New Zealand, and representing those who are exporting to the best of our abilities in these negotiations.”
With Ardern and Peters set to meet Donald Trump, Justin Trudeau and many others at Apec, they will soon have the chance to clarify the new government’s approach to the outside world.
