Luxon downplays Trump Meeting, Focuses on Asia Trip
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prime Minister Christopher Luxon appears unfazed by the prospect of a first in-person meeting with former US President Donald Trump. Speaking to the Herald, Luxon indicated he felt a “good connection” had been established during a phone conversation following Trump’s election.
“It is about building the relationship.We are good partners to the US,” Luxon said, while reaffirming New Zealand‘s commitment to “our independent foreign policy.” He acknowledged potential disagreements on trade, stating, “We will have different views on trade, as we’ve articulated pretty well into their system. We’ll see how it goes, but if it happens, great, and if it doesn’t, you know, so be it as well.”
Luxon departs today for an Asia trip, beginning in Kuala Lumpur, Malaysia, for the East Asia Summit (EAS). The EAS includes key global players like Australia,China,Russia,and the United States,alongside numerous Asian nations.
The trip highlights New Zealand’s growing investment in Southeast Asia – its fourth-largest trading partner as a bloc, with two-way trade reaching nearly $30 billion in the year to June, led by dairy exports. Key economic partners within the region include Singapore, Indonesia, Malaysia, and Thailand.
The current government has significantly increased engagement with Southeast Asia, including 40 visits by the Prime Minister and ministers, the creation of 22 new diplomatic and trade roles, and a $12 million fund to support regional initiatives. Potential milestones include celebrating 50 years of dialogue with Asean and perhaps signing a Comprehensive Strategic Partnership to upgrade New Zealand’s trading relationship.
‘From rules to power’
So how does the leader of a small nation like New Zealand, with an economy reliant on a stable international trading order, navigate all this volatility?
Luxon repeats it’s all about relationships and building a group of friendly nations that can resolve “any future trading or economic issues rather than have the whole system break down”.
“That’s not what we want to see. I will be reaffirming that very strongly in my Apec interventions. I am talking to a lot of these leaders quite regularly… we’ve built very good rapport and good relationships with these leaders.”
Luxon eyes new trading alliances as global disruption looms
The Prime Minister will have a long list of bilateral meetings on his agenda this week.Photo / Mark mitchell
The real challenge, Luxon said, comes with the “disruption” to the global trading environment, “which is what we first encountered in quarter two this year”, referring to New Zealand’s gross domestic product going backwards.
“There was just massive amounts of uncertainty and consequently, that literally puts the brakes on investment and spending.”
New trading group
To create a buffer against that type of tumult in the future, the Prime Minister has been championing a new international trading platform built alongside other partners that respect rules.
Following Trump’s so-called Liberation Day,Luxon hit the phone with other world leaders to explore the idea of members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) working together with the European Union (EU).
That received the backing of EU President Ursula von der Leyen in June, and Luxon confirmed to the Herald that CPTPP trade ministers and their EU counterparts will meet before the end of the year.
A similar partnership is in the works between Asean and the EU, with Luxon saying the three groups amounted to 40% of global trade.
“We need a trading platform and a dialogue, which we will have in place before the end of the year in both cases, in or
‘US is leaving globalisation fleet’
Former Trade Minister Tim Groser told the Herald he hopes Apec will provide an chance for a discussion between the CPTPP nations about a partnership with the EU.
He agrees with Canadian Prime Minister Mark Carney that Trump has caused a “rupture” to international trade but finds it noteworthy that most other major economies haven’t “wanted to follow the United States down this line”.
“The US is leaving the globalisation fleet to go on indefinite shore leave, but we’re still steaming ahead as we like a rules-based system,” Groser said.
“We don’t like this system whereby things change on a daily basis, undermining business confidence. How can you run an international economy where every day the rules change?”
While the absence of European nations provides some limit to any progress at Apec, Groser said it would be appropriate for the idea to be raised between the Canadian, Australian, Japanese and New zealand leaders.
“The rest of the world is not going down this whirlpool with the United States,and it’s a very important reassuring point.”
He’s been to numerous Apec meetings and said while it might potentially be a cliche, the leaders’ meetings are really all about “speed dating”, arguing you can’t “divorce personal relationships from foreign policy”.
But Groser would be “astonished” if Luxon secured a meeting with the US President.
“The usual diplomatic reality for a country of 5 million is a pull-aside, a rapid five-to-10-minute handshake and exchange, which will serve the purpose of personal relationships.”
New Zealand Diversifies Trade Options Amidst Global Economic Challenges
New Zealand is actively pursuing a diverse range of trade partnerships to navigate a challenging global economic landscape. this strategy focuses on strengthening political relationships to unlock commercial benefits, notably within the growing ASEAN (Association of Southeast Asian Nations) region. the move comes as New Zealand seeks to build resilience against global economic headwinds, including the impacts of trade tensions and shifting geopolitical dynamics.
The Importance of Diversification
The current global trading environment is marked by uncertainty. As noted by Jamie Ensor, a senior political reporter for the NZ Herald, building strong political relationships is crucial for securing favorable trade outcomes https://www.nzherald.co.nz/. Diversifying trade partners allows new Zealand to reduce its reliance on any single market,mitigating risks associated with economic downturns or political instability in specific regions.
This approach is particularly relevant given recent global events, such as the trade disputes initiated during the Trump administration, which impacted global supply chains and trade flows. New Zealand’s proactive engagement with various countries aims to create a more stable and predictable trade environment.
Focus on the ASEAN Region
The ASEAN market is proving to be a particularly valuable area of focus for New Zealand exporters. The region’s robust population growth and ongoing economic development present significant opportunities. According to Ensor, ASEAN has demonstrated resilience in the face of global economic challenges, including the effects of tariffs imposed during the Trump era.
ASEAN member states include Brunei, Cambodia, Indonesia, Laos, malaysia, Myanmar, the Philippines, Singapore, thailand, and Vietnam. These countries collectively represent a significant and rapidly expanding consumer base. New Zealand’s existing trade agreements with several ASEAN nations, such as the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) [https://www.mfat.govt.nz/en/trade/free-trade-agreements/asean-australia-new-zealand/], provide a framework for increased trade and investment.
Recent Trade Developments & Future Outlook
New Zealand continues to actively pursue and update trade agreements.Recent efforts include:
* CPTPP: New Zealand is a key member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) [https://www.mfat.govt.nz/en/trade/free-trade-agreements/cptpp/], a free trade agreement with 11 countries in the Asia-Pacific region.
* EU FTA: Negotiations for a free trade agreement with the European Union (EU) were concluded in 2022 and are now undergoing ratification processes [https://www.mfat.govt.nz/en/trade/free-trade-agreements/european-union/]. This agreement is expected to significantly boost trade between New Zealand and the EU.
* Ongoing Explorations: New Zealand is also exploring potential trade partnerships with other regions and countries, demonstrating a commitment to ongoing diversification.
Looking ahead, New Zealand’s strategy of diversifying its trade relationships is expected to become increasingly important. The global economic landscape is likely to remain volatile, and proactive engagement with a wide range of partners will be essential for ensuring continued economic growth and stability.
Key Takeaways:
* New Zealand is prioritizing trade diversification to mitigate global economic risks.
* The ASEAN region is a key focus due to its growth and resilience.
* Existing and future free trade agreements are crucial for expanding trade opportunities.
* Strong political relationships are seen as essential for securing commercial benefits.
About Jamie Ensor:
Jamie ensor is a senior political reporter for the NZ Herald based in Parliament. He previously worked as a TV reporter and digital producer for Newshub and was a finalist for Political Journalist of the Year at the Voyager Media Awards.