07 March 2022

New Zealand's foreign policy signals virtually no virtue

The war on Ukraine and more specifically the war on Ukrainian people is heart-breaking, revolting and has rightfully appalled most governments around the world. The response of many countries have been wide ranging sanctions. The Financial Times summarises many of them imposed by the US, UK, EU and other Western countries like Canada and Japan including:

  • Travel bans and asset freezes for Russian and Belarus politicians and officials
  • Bans and sanctions on banks, including prohibitions on trading and borrowing by financial institutions
  • Bans on Russian companies raising finance and bans on trading with major Russian companies
  • Restrictions on technology exports, including aerospace and telecommunications 

Australia has imposed its own series of autonomous sanctions, including banning exports of oil exploration technologies, prohibiting financial institutions from providing credit or loans to Russian financial institutions, military or petroleum companies. 

Even scrupulously neutral Switzerland has imposed asset freezes on certain Russian individuals. 

How about New Zealand? The Wall Street Journal has highlighted it for shame.

Well it has done the following

  • a travel ban on Russian officials "involved with the invasion" (even though none could ever travel to New Zealand under current rules that prohibit entry to NZ for non-permanent residents/citizens without specific visas)
  • Prohibit exports to Russian military and security forces
  • Suspended bilateral foreign ministry consultations.

It's literally pathetic. Now the Government has since announced it will be looking to pass legislation to go further, but given NZ's foreign policy is awash with virtue signalling, this looks very much like very little virtue at all.  The constant declaring of what they might be thinking of doing is par for the course for this government led by someone who wants global acclaim.

Look at two of NZ's virtue signalling foreign policies:

  • Anti-nuclear policy: This has achieved absolutely nothing to enhance the peace and security of NZ or anywhere else in the world. However, it is the height of virtue signalling against the US, UK and France.
  • Climate change policy: NZ's contribution towards reducing climate change has infinitesimal impacts, but the Ardern Government wants to be "leading" global commitments to reduce climate change, regardless of the economic cost. It's a showcase designed to encourage others to go further, rather than to simply follow in concert with NZ's major trading partners, but in actual impacts it is almost "net zero".

Yet when a nuclear-powered sovereign state attacks another sovereign state, NZ is found wanting. Of course the Government rejected Gerry Brownlee's bill for multiple reasons.  Minter Ellison Rudd Watts gives various reasons for it being rejected.  

It concluded that "it is likely that the specific regime proposed would have achieved little more than political signalling (and some counter-productive signalling at that)". Yet that has been at the forefront of so much foreign policy to date.  The "counter-productive signalling" is being able to act outside multilateral organisations, but this is exactly what the problem is today. A Permanent Member of the UN Security Council is waging war, and multilateralism wont address this, as much as well-meaning NZ lawyers might think this is "counter-productive" they aren't likely to be victims of war waged by Russia, or indeed China. (Note the lawyers call Ukraine "the Ukraine", unfortunately). 

However the lawyers mainly opposed it because "if passed, the Bill would certainly have further complicated the regulatory compliance obligations of New Zealand exporters, importers and trade facilitators".  Do they seriously think Ministers would impose sanctions in some manner that doesn't take into account the impacts on those trading and investing in sanctioned countries? How is this remotely different to NZ having to impose sanctions mandated by UN Security Council Resolutions?

I'm not going to say Brownlee's Bill was perfect, but its timing deserved more attention. It certainly shouldn't have been rejected because moral equivocating Marxists like Teanau Tuiono think it might create "further risk of politicisation of sanctions rather than fairness and equity" (code for sanctions on regimes he quite likes). 

Now NZ sanctioning Russia would largely be symbolic, but it is also about plugging gaps in the global financial and trading system.  The New Zealand Dollar is apparently the tenth most traded currency in the world, so NZ does actually need to plug the risk that it will be used to subvert sanctions from other jurisdictions.  Fonterra has already announced it is suspending exports to Russia. 

Russia takes 0.49% of NZ's exports by value (27th place), slightly less than Egypt. Whereas about 0.97% of NZ's imports come from Russia (19th place), with NZ being a net importer from Russia. The main export is dairy products, the main import is oil products. 

There is no good reason to hesitate. If Switzerland... SWITZERLAND... which until recently refused to join the United Nations in order to remain neutral, can impose sanctions quickly, so can New Zealand.  

To say it can't do it quickly is of course a nonsense. The Ardern Government has demonstrated that when it sees urgency, it gets legislation drafted and passed under extraordinary urgency when it wants, and did so for Covid 19. It could get legislation drafted and passed in the coming week if it wanted to.

The difference is that the Ardern Government didn't plan to have to deal with actual war, war that shows the limits of the United Nations, war that was predicted for weeks in advance.  

It really does need to join the rest of the world, and quickly.


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