It is a heavyweight foreign affairs week for the Prime Minister, with the arrival today of Australian Prime Minister Anthony Albanese and then the US Secretary of State Anthony Blinken tomorrow.
At the same time the European Union’s top diplomat has also been in the capital.
Ironically Blinken will follow Albanese back to Australia for this year’s “AUSMIN” Ministerial talks which are what is left of ANZUS after New Zealand was effectively kicked out in 1985.
Albanese will get a formal welcome at Parliament and then tonight attend a banquet at Government House to mark 40 years of the Closer Economic relationship with Australia.
Last week’s Australia-New Zealand Leadership Forum talks suggested that was an anniversary noted here more than in Australia.
Blinken is ostensibly here to follow the United States women’s soccer team.
But he will get a full Powhiri at Parliament and meet with Foreign Minister Nanaia Mahuta and the Prime Minister.
Blinken’s visit here has to be seen in the context of the growing strategic rivalry in the Pacific between China and the US and the continuing pressure on New Zealand to lean more towards the US and Australia rather than China.
As part of that, he will arrive via Tonga, where the US is opening an Embassy.
Tonga is the Pacific’s most worrying state, with heavy debts to China and troubled internal politics, which erupted in riots in 2006.
The International Monetary Fund late last year said the country’s debt obligations are largely external, with over half of total public debt to China Exim Bank.
“Debt repayments are expected to pick up in FY2024, mainly to the Exim Bank, and stay elevated at over 3 per cent of GDP until FY2027,” the IMF said.
The IMF is not optimistic things might improve.
“Tonga’s growth potential is low due to its exposure to natural disasters, geographical remoteness, and a limited production base.,” it said.
Thus, a greater US presence in the country is obviously a precaution to ensure that China, with its debt, does not gain a greater foothold there.
But one of the distinguishing features of Tonga’s situation is that it has been made worse by international events.
“In addition to frequent natural disasters, a faster-than-expected rise in international food and energy prices due to geopolitical tensions, including the war in Ukraine, could significantly weaken private consumption.” The IMF report said.
That “globalisation” of the effects of the Ukraine war was a point made in Wellington yesterday by Stefano Sannino, who is Secretary-General of the European External Action Service (EEAS) of the European Union. The EEAS is the EU’s equivalent of our Ministry of Foreign Affairs and Trade. (MFAT)
Sannino has been in Wellington briefing top officials from MFAT, the Ministry of Defence and the Department of Prime Minister and Cabinet.
In an exclusive interview with POLITIK, Sannino said the world faced a paradoxical situation.
“What we are losing in terms of globalisation in the economic sector., we are gaining in terms of security in foreign policy,” he said.
“The security theatre has become one.
“So, what is happening in North Korea or what is happening in Iran in terms of proliferation is a problem for everybody.
“It’s not a problem only for the countries which are closer to these two.
“What is happening in Ukraine, after the Russian aggression, is having consequences not only for Ukraine or for Europe but is having consequences globally with the rise of the agricultural prices, the rise of energy prices, the rise of inflation.
“This is something that, because we have become so interconnected, it’s very difficult to isolate one part, one specific crisis.
“And that’s why, I mean, whether we like it or not, we are all on the same boat, and somehow we need to make sure that this boat is not sinking.”
It is that globalisation of crises which is why he is in Wellington, but also because he believes the fact that the EU is not aligned with either the US or China makes it a natural partner for New Zealand and its independent foreign policy.
“There are very many similarities in the approach of New Zealand and the European Union when it comes to the way we see our societies,” he said.
New Zealand and the EU have had an economic relationship since 1967 when the United Kingdom began its negotiations to join what was then the European Economic Community, and when it succeeded in 1973, New Zealand found new restrictions on its meat and dairy exports to Britain and Europe.
That set the tone of the relationship until recently.
Sannino said things had changed, and there was now more to the relationship than economics.
“There is a completely different dimension that is coming into the for,” he said.
“Think about what is happening in the area of information manipulation, interference and how a number of foreign actors are using this tool in order to influence the political process in our countries.
“See what is happening with the cyberattacks and how our infrastructure or our networks are under constant attack by yet again by a number of actors.
“The economy is being instrumentalised and becomes a tool that is used not to link countries but to impose your view on others.
“So there are a number of elements which have made the security landscape much more complex; it’s not just a question of physical security or military security.”
But for all that, the EU is targeting China with its “derisking” policies, which encourage businesses to develop alternative supply chains to China.
At the recent World Economic Forum in Tianjin, the Director General of the World Trade Organisation, Ngozi Okonjo-Iweala, said that derisking along with the United States policy of “decoupling” could cut five per cent off world GDP in the longer term, equivalent to removing the entire Japanese economy.
Sannino defended the policy as a response to some of China’s controls on the export of rare minerals, such as the restrictions coming in on August 1 on the export of gallium and germanium, which are used in the manufacture of semiconductors.
“We have never said that we want to move away from China or hamper the development of China. But what we are saying, because we have seen it, is that China is using economic leverage in a political way, “ he said.
The question of rare minerals is expected to be discussed by Blinken when he is in Australia for the AUSMIN talks because Australia believes it can fill some of the gaps left by China at the same time as it will need the minerals for the construction of its AUKUS nuclear submarines.
In a paper published last night, the Australian Strategic Policy Institute (ASPI) said the main focus of the AUSMIN talks would be China.
“Behind closed doors, the main topic of this AUSMIN will be competing with Beijing and deterring its regional ambitions,” the paper said.
“(Australian Foreign Minister Penny)Wong and Blinken can compare notes from their respective meetings in Jakarta this month with Wang Yi, who directs the Chinese Communist Party’s foreign affairs apparatus and outranks the elusive foreign minister, Qin Gang,” it said.
“The Goldilocks point in statecraft towards China is signalling unity, resolve and capability to Beijing on the one hand, while reassuring the region that a robust Australia–US alliance will mitigate, not exacerbate, the risk of war.”
Both Blinken and Hipkins have met China President Xi Jinping within the last two months, so they will be able to compare notes. Albanese has yet to travel to Beijing.
Observers will be watching to see how much Hipkins gets drawn into the policies of the United States and Australia in terms of containing China and how much he honours the independent foreign policy started by his Labour predecessor David Lange in 1985.
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