How did G20 become G21? In what possible ways could it benefit Prime Minister John Key, and New Zealand in particular? Let us explore
It all began with the Australian Prime Minister Tony Abbott extending an invitation to his Kiwi counterpart, John Key, to attend the G20 Summit earlier this year.
At the recently concluded hobnobbing of world leaders in Brisbane, many issues were taken up that is also of concern to Aotearoa. These include strengthening growth, job creation, and building global economic resilience.
The G20 countries together make up for 85 per cent of global economic activities and 75 per cent of global trade. From among the 20 economies present, NZ has trade ties with 14 of them. So the invitation was of strategic importance to NZ, and also to Australia.
By extending the invitation to Key as his guest, Abbott, who chaired the Summit this year, opened the doors for the former to engage in productive discussions with European leaders. Ebola and ISIS proved pivotal in many discussions around global economic recovery through robust future projects.
The invitation also showcased the attitude of the Abbott government towards its island neighbour. Perhaps one could interpret it as a big brotherly arm around the smaller economy. But definitely there is no question of sibling rivalry.
NZ is a “small trading nation” compared to the G20. However, it is an important trading partner to many big economies around the world. So Key’s engagement with the world leaders provided valuable inputs. “New Zealand’s economic prospects are closely intertwined with those of G20 member countries,” commented Key on the eve of the Summit, that saw the big three leaders in the same room: Obama, Putin and Xi.
In fact, Key started on his journey to meet world leaders earlier in the week when he attended the APEC leaders’ summit in Beijing and finalised the Trans-Pacific Partnership (TPP) trade deal, while China used this opportunity to restart talks on an APEC-wide FTA. Interesting to mention here, China is not part of the TPP deal.
On this trip Key also inaugurated the New Zealand Consulate-General in the Western Chinese city of Chengdu. “New Zealand is among the first group of countries in the world to open a diplomatic post in Chengdu,” said Key.
“This is a natural continuation of our expanding and increasingly close relationship with China. The Consulate-General in Chengdu is one of six new posts the Government has opened since 2008. The others are in Abu Dhabi, Addis Ababa, Myanmar, Barbados and Honolulu.
Key’s trip to China was followed by a stopover at Myanmar to attend the East Asia Summit that deals with regional security. The G20 Summit was the third international meet that Key attended at the end of the same week. During the same week, German Chancellor Angela Merkel expressed support for an EU-NZ FTA during her visit to Auckland. By the time Key landed in Brisbane, he had already met some of the G20 leaders and was conversant with their views on certain issues of global interest.
A crucial Free Trade Agreement was concluded on the first day of the G20 summit, between NZ and the Republic of Korea. “Korea is one of New Zealand’s biggest and most important trading partners,” said Trade Minister Tim Groser. “The FTA will deliver real economic benefits for both our countries. It will create more opportunities for our business and will deliver cheaper products to consumers. It’s a win-win agreement.
The G20 Summit, thus, turned out to be an opportunity for NZ to not only showcase its economic and trade credentials,but also upgrade the country’s profile with regard to upcoming business potentials. To Key it was a chance of a lifetime – not only to make the country’s impact felt among the leaders of the richest economies of the world, but also to strengthen his government’s position on his home soil.
It helps that NZ also got elected to the Security Council, thereby strengthening the country’s position in international affairs. The G20 Summit aided Key to do his homework and thereby boost its veto power in the country’s favour before NZ formally took its seat at the Security Council in January 2015.
The P-5 members of Security Council have the power to veto down any reform suggested by other members of the Council. The G20 Summit gave Key an opportunity to meet these powers and discuss options for reform before meeting them officially on the floor of the Council.
Key staying at the same hotel as French President Francois Hollandehad crucial strategic potential, given that France has so far been the only P-5 member open to reform.
At the working dinner, Key had a brief chat with the Russian President Vladimir Putin – which was mostly a monologue as Putin “didn’t say much”. But the Kiwi PM voiced his views, along with other world leaders, against Russia’s encroachment in Ukraine and also the crash of the Malaysian aircraft on the disputed land, stalling all investigations on the crash. Key also pointed out that two New Zealanders were travelling on the ill-fated flight.
This exchange showcased Key’s determination to take a stand on what NZ feels strongly about. In fact, he later defended it by saying that you don’t “need to be rude or disrespectful, but you wouldn’t change your position” just because it is an international event. It’s another story that Fonterra continues to export dairy products to Russia, because NZ doesn’t have formal trade sanctions with Russia.
Although Abbott averted it, Obama brought up the issue of climate change and giving it a much-required momentum. Key’s position in favour of the cause will perhaps earn NZ a say at the Paris Climate Summit in 2015, where countries will have to submit their reports on 20/20 emission targets. However, a stricter fuel efficiency plan might end up raising the power bill of poorer households in the country – something that the current government wouldn’t want to engage in.