Shifting power: New Zealand on US decline

Jun 17, 2024
Washington, USA. 11th Apr, 2024. US Department of State Secretary Antony Blinken hold a meeting with New Zealand Foreign Minister Winston Peters, today on April 11, 2024 at State Department headquarters in Washington DC, USA. Image: Alamy/ Lenin Nolly/Sipa USA/Alamy Live News

After meeting with Secretary of State Antony Blinken last April, New Zealand’s Minister of Foreign Affairs, Winston Peters, sa­id that the two countries had pledged “to work ever more closely together in support of shared values and interests.” In recent moves exemplifying this support, New Zealand has deployed a targeting team to a United States-led coalition conducting strikes against Yemen, extended its military participation in the US proxy war in Ukraine, and is considering membership of AUKUS, the anti-China military agreement between Australia, the United Kingdom, and the United States.

New Zealand’s increasingly enthusiastic support for the bilateral relationship coincides with the growing weakness of its foundation, namely US hegemony. Identifying this weakness is a paper submitted in February to the Cabinet Foreign Policy and National Security Committee, which oversees the country’s foreign policy, national security, and spy agencies (as much as any minister oversees the latter). In the heavily redacted paper, officials state that New Zealand “can no longer rely on the durability of the international rules-based system…that has been the foundation of trade and economic policies for decades.”

The decline of the international rules-based system—more accurately called the US-led imperial order—is taking place in three interconnected “Big Shifts”: “from rules to power,” “from economics to security,” and “from efficiency to resilience.” Although the paper reveals little information concerning these shifts, the Ministry of Foreign Affairs and Trade addresses them in more detail in its 2023 Strategic Foreign Policy Assessment, Navigating a shifting world.

The shift from rules to power denotes a transition “towards a multipolar world,” according to the Cabinet paper. During this period, “rules are more contested and relative power between states assumes a greater role in shaping international affairs.” Elaborating on what constitutes these rules in the foreign policy assessment, officials list “the United Nations system, the World Trade Organization, and the Bretton Woods Institutions” (the International Monetary Fund and the World Bank) as “the most prominent examples” of the “multilateral institutions” that “underlie…the current rules-based international system.”

Here a distinction should be made between the United Nations and the latter three institutions, although the IMF and the World Bank work with the UN as Specialized Agencies. The UN Charter, despite its establishment of the veto power of permanent members of the Security Council, is “the most important treaty on the planet,” constituting “an attempt to end war and ensure that every human life is cherished,” writes historian Vijay Prashad.

In contrast, the WTO’s rules on intellectual property rights protect monopoly pricing and prevent development (although the US has disabled the organisation’s disputes mechanism while at least some of the country’s mounting tariffs violate global trade rules). By the same token, the austerity policies of the IMF and the World Bank have heavily indebted the Global South and ensured the supremacy (now in doubt) of the US dollar. Seemingly responding to such criticisms, the ministry acknowledges that the rules-based system “primarily” reflects the interests of “‘western’ liberal democracies.”

However, officials choose not to acknowledge the US’s long-demonstrated willingness to violate the “rules” of these institutions—a willingness clearly articulated in US ambassador to the UN Linda Thomas-Greenfield’s false statement in March that the Security Council resolution demanding a ceasefire in the Gaza Strip was “non-binding.” Correspondingly, constituting a challenge to the global order is that “many countries do not see their interests reflected in key elements of the current system.”

The alignment of the rules-based system with US interests becomes plainer when officials specify what they consider to be its foremost threats. In addition to threats posed by designated US enemies China, North Korea, and Iran, “the clearest example” of a state “exercising hard power” to challenge the rules-based system is “Russia’s unprovoked and illegal invasion of Ukraine.” The well-rehearsed assertion that the invasion was unprovoked is contrary to NATO Secretary General Jens Stoltenberg’s admission that Putin invaded Ukraine “to prevent NATO, more NATO, close to his borders,” that is to counter the prospect of continued eastward expansion of the hostile military alliance. This context suggests that the shift from rules to power really concerns the increasing willingness and capability of states to defy US dominance.

The response of the imperial order to acts of defiance is prompting the shift from economics to security, i.e. to further attempts at economic coercion. According to the Cabinet paper, states’ “economic relationships” are being “reassessed in light of increased military competition in a more securitised and less stable world.” The ministry’s only specific example of this conduct is the decision of “European nations to decouple from Russian energy, despite the significant economic pain that results” (including Germany’s possible deindustrialisation) and impose “associated economic sanctions.” These sanctions’ minor impact on Russia’s financial sector, even according to The Economist, suggests “an epochal shift in the global financial system” featuring reduced “dependence on Western capital, institutions and payment networks, and on America in particular.”

Taking place alongside the West’s failing assertion of economic control is the purported shift from efficiency to resilience, which refers to very limited trade diversification away from US adversaries, most notably China. According to the foreign policy assessment, “governments and corporations around the world are giving increased weight to economic resilience over economic productivity as they factor in greater uncertainty and risk.” Shortly afterwards, however, officials accept that this de-risking strategy “is not practical for most countries.” Accordingly, it will probably “be limited to a handful of strategic industries in large, affluent countries.”

Likely providing additional impetus for continued close trading relationships with China is the prospective decline of US economic influence. “Without participating in existing plurilateral trade arrangements in the Indo-Pacific region,” the ministry states, “US trade and investment competitiveness and economic influence could potentially decline relative to other major players.” Evidently of minor concern is the warning by a group of UN experts that plurilateral trade arrangements like the Trans-Pacific Partnership (later renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) can have “retrogressive effects on the protection and promotion of human rights.” Predicting the decline of US economic power in the region with certainty, former Minister of Trade Tim Groser told journalist Sam Sachdeva, “the Americans are in retreat, there’s no doubt in my mind about that.”

Despite believing that New Zealand “benefit[s] strongly from the current order,” officials acknowledge that it “may evolve into a more cooperative and inclusive multipolar world, with a system (and underlying rules) that reflects a more diverse range of views and values.” However, noticeably absent in this passage is any reference to the UN Charter and international law. If the ministry seriously accepts the urgent need for “multilateral governance arrangements…addressing climate change and environmental degradation” as well as the heightened risks of “overt state-to-state armed conflict and nuclear war,” it should reconsider New Zealand’s support for the declining superpower that has brought these existential threats to the fore.

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