Two speeches yesterday — -one from Foreign Affairs Minister Murray McCully and the other from Treasury Secretary, Gabriel Makhlouf — have both addressed the Trump and Brexit phenomena head on, an indication of how seriously the Government believes it must address the possibility of a nationalistic upsurge here. 

These follow a clear indication from the Prime Minister over the weekend that any future tax cuts must be aimed at those on lower incomes; another move to try and “include” those who might feel excluded.

Both speeches were given at a New Zealand Institute of International Affairs conference in Wellington.

McCully quoted Prime Minister John Key speaking to the Institute earlier this year, “ “Fortress New Zealand’ simply doesn’t work for us.”

“Internationally, open borders and free trade have become targets for domestic discontent,” said McCully.

“We are seeing impulses to erect barriers, not pull them down.

“There are two important questions for New Zealand that have arisen this year.

First, how will Brexit and the forces that brought it about play out for Europe, and for the UK in the coming months?

“Both of these are of great interest to us.

“And second, how will the Trump Presidency change the balances that impact on the stability and security of the Asia-Pacific region?”

McCully said that Trump had said the US would pull out of the TPP but “an Asia-Pacific pivot without the trade and economic substance is no pivot at all.” (a reference to President Obama’s “pivot” to Asia to reduce the US emphasis on the Middle East as the focus of its foreign policy.)

And McCully asked whether a trade and economic substance is something we would see in due course.

“The answer to this question, will, in turn, impact on the evolution of the diplomatic and security architecture in the region<” he said.

“ Especially when you add into the mix the emergence of a quite different style of President in the Philippines and the changes taking place amongst some of our other ASEAN partners.”

Makhlouf warned that rising protectionism and “A world closing in on itself” could hit New Zealand hard.

He said that to ignore the debate that had happened in Europe and the US would be a mistake; therefore we needed to do four things:

  • “First, we need to recognise that while free trade and globalisation have undoubtedly been good overall, they haven’t been good for everyone all of the time.”He argued that In some advanced economies low and middle-income earners had seen their incomes stagnate; they believed the benefits of globalisation had accumulated to other people and to other countries while leaving them behind. “The impacts of globalisation – real or perceived – have to be recognised and addressed head-on,” he said.
  • “Second, with the anti-globalisation movement getting so much air-time, the public need the chance to hear clear and compelling reasons why international connectedness is good for the community at large, especially in a post-truth world facing the modern challenge of so-called ‘fake news’. “ And he reflected a widespread view in Government that the business was not particularly supportive of the TPP negotiations  when he said  “The business community, in particular, needs to be making the case for free trade, loudly, clearly and regularly.”
  • “Third, let’s make that case tangible.” This is something Trade Minister Todd McClay has taken to doing in his speeches by directly linking free trade to jobs in industries or districts.
  • “Fourth, let’s seize the opportunities in front of us.  Globalisation is alive and well in our region. And across most of the rest of the world.  In Asia the debate isn’t about closing up; it’s about how to grow, how to improve infrastructure, how to connect with trade partners in the region and beyond and how to enjoy increased prosperity. New Zealand is closer to the driving force of global economic activity than ever before, and we must take advantage of this if we are to keep raising our living standards.”

These speeches are a measure of how concerned the Government is about the possibility of an anti globalisation backlash here that could inspire a Kiwi Trump or Brexit political phenomenon. 

Obviously NZ First could be the vehicle for something like that but the widespread opposition to the TPP, much of it ill-informed, and Labour’s willingness to submit to it, was an indication that the globalisation that both McCully and Makhlouf talked about can not be taken for granted in New Zealand.

This may be one of the sleeper political issues for next year.