GOP senators versus Trump’s TPP and trade tirades

Yesterday in New Zealand the text of the Trans-Pacific Partnership (CPTPP) was released. Next month it is likely to be signed by the eleven countries who renegotiated some parts of the agreement after Donald Trump pulled the United States out soon after becoming president.

Trump had strongly criticised the TPP during the presidential campaign. It’s hard to know whether he thought it was a ‘bad bad deal’ or it was an attempt to sound tough on trade in order to get more favourable deals.

If it was a bluff it failed, because the TPP is proceeding without the US.

Last month (26 January 2018) Trump appeared to soften his stance on the TPP in an interview with CNBC while at DAVOS: Read President Trump’s full remarks on trade deals to CNBC

  • In an interview with CNBC, he says he could rethink the Trans-Pacific Partnership if the U.S. can secure a better deal.

Trump’s remarks on the TPP:

Trump: I like bilateral, because if you have a problem, you terminate. When you’re in with many countries — like with TPP, so you have 12 if we were in — you don’t have that same, you know you don’t have that same option. But somebody asked me the other day, ‘Would I do TPP?’ Here’s my answer — I will give you a big story. I would do TPP if we made a much better deal than we had. We had a horrible deal. The deal was a horrible deal. NAFTA’s a horrible deal, we’re renegotiating it. I may terminate NAFTA, I may not — we’ll see what happens. But NAFTA was a — and I went around and I tell stadiums full of people, I’ll terminate or renegotiate.

(NAFTA is an agreement between the US and two TPP countries, Canada and Mexico. Trump insisted on it being renegotiated, but that appears to be bogged down. See below.)

Kernen: So you might re-enter, or? Are you opening up the door to re-opening TPP, or?

Trump: I’m only saying this. I would do TPP if we were able to make a substantially better deal. The deal was terrible, the way it was structured was terrible. If we did a substantially better deal, I would be open to TPP.

Kernen: That’s interesting. Would you handicap … ?

Trump: Are you surprised to hear me say that?

Kernen: I am a little bit, yeah, I’m a little taken aback.

Trump: Don’t be surprised, no, but we have to make a better deal. The deal was a bad deal, like the Iran deal is a bad deal, these are bad deals.

Yesterday the Washington Post reports: 25 GOP senators urge Trump to restart TPP trade talks, a deal he called a ‘disaster’

Twenty-five Republican senators, including Senate Majority Whip John Cornyn (R-Tex.), sent President Trump a letter Friday asking him to “re-engage with the Trans-Pacific Partnership.” It’s the latest attempt by Republican lawmakers to get Trump to take a softer stance on trade, even though his administration is gearing up to erect more trade barriers. Trump withdrew from the TPP in his first week in office after calling the trade deal a “disaster” and a “rape of our country” during his presidential campaign.

“We encourage you to work aggressively to secure reforms that would allow the United States to join the agreement,” the senators wrote. “Increased economic engagement with the 11 nations currently in TPP has the potential to substantially improve the competitiveness of U.S. businesses, support millions of U.S. jobs, increase U.S. exports, increase wages, fully unleash America’s energy potential, and benefit consumers.”

There is a sharp divide between congressional Republicans and the Trump administration on how to handle trade. Trump blasted America’s trade deals during his campaign and vowed he would either renegotiate many deals or scrap them, but many senators believe harsh action on trade would backfire, causing the loss of U.S. jobs and businesses.

Ripping up the TPP was a key talking point of Trump’s campaign. He portrayed it as a deal that President Barack Obama and Democratic candidate Hillary Clinton concocted. It would lower tariffs — better known as taxes — on goods traded between the United States and 11 other countries in the Pacific Rim (Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Malaysia, Singapore, Vietnam and Brunei).

Supporters of free trade, including many Republicans, worried that Trump had made a mistake. They feared the United States was giving up its leadership role and ceding even more power to China. China was excluded from the TPP in an attempt to counter the communist country’s growing influence on the global economy.

After the United States pulled out of TPP in January 2017, Canada took over the leadership role.

Actually Japan probably took over more of a leadership role, and Canada caused a few hiccups in Vietnam last November, but eventually agreed on the CPTPP.

Many of the GOP senators who signed the letter are from states with a lot of agriculture, including Joni Ernst of Iowa, John Barrasso of Wyoming and Ben Sasse of Nebraska.

“Farm states were a lot of the big losers from the United States not going ahead with TPP,” said Chad Brown, a senior fellow at the Peterson Institute for International Economics. “TPP would have lowered agriculture tariffs in a couple of countries where they had been high.”

Perhaps the best example is that Japan was willing to lower its tariffs on U.S. beef, opening a potentially lucrative market for American farmers. But now that the TPP is moving forward without the United States, Australian and New Zealand farmers probably will be the biggest beneficiaries.

Yesterday the Canadian Globe and Mail reported in Where do NAFTA talks go from here?:

“We got a blunt and sobering message last week from Steve Verheul, Canada’s head NAFTA negotiator, telling us that negotiations with the Americans are bogged down and, apart from some agreement on peripheral things, there’s absolutely no movement on the really tough issues.

The fundamental problem, Mr. Verheul said, is that the United States isn’t approaching the negotiations with the objective of concluding a balanced deal. The Trump administration’s position is “America First” and “America Only,” reflecting the tone of the President’s bellicose inaugural address.

As a result, the United States has tabled one-sided, intransigent positions, non-starters for Canada from day one. U.S. negotiators have no room to compromise because of orders from the White House. It’s clear that there’s a long, slow and painful road ahead in trying to achieve a North American free-trade deal, with agreement pretty remote at this stage.”

The US also faces trade problems in Europe. Forbes – EU Tells Trump: No Paris Climate Deal, No Free Trade

When Donald Trump took office last year, the assumption was that the transatlantic trade and investment partnership was dead.

The controversial free trade deal between the EU and the U.S., known as TTIP, was already years in development and was a big focus in Europe, particularly with left-wing protesters who said the EU would necessarily have to lower its environmental, health and safety standards to American levels. When Trump was elected on an anti-free-trade platform in 2016, these activists found themselves in the uncomfortable position of being on the same side as the new U.S. president.

Work on TTIP has come to a halt, although the European Commission has been keen to stress that it is not officially dead and talks could continue if the U.S. administration were to indicate interest. No such signal from Washington has been forthcoming.

It is in this context that France’s foreign affairs minister Jean-Baptiste Lemoyne told the French Parliament last week that his country will insist that TTIP never be revived if Trump carries through on his promise to leave the Paris Agreement.

“One of our main demands is that any country who signs a trade agreement with EU should implement the Paris Agreement on the ground,” Lemoyne said. “No Paris Agreement, no trade agreement. The U.S. knows what to expect.”

The US under Trump’s leadership is at risk of isolating itself on trade as the rest of the world continues to negotiate and make trade agreements.

Cyclone Gita due to hit today

Severe weather warnings have been issued as cyclone Gita approaches New Zealand today.

Tropical cyclone Gita zig zagged through the tropics last week, first tracking east, then swinging in a u-turn to head west,causing damage in Samoa, Tonga and Fiji as well as New Caledonia on it’s way. It then swung in an arc south west then southward, then south eastward towards the middle of New Zealand.  While no longer tropical cyclone strength there are warnings it may cause major problems through heavy rain, strong winds and a storm surge (up to 7 metre swells).

CYCLONE GITA UPDATE (Metservice 2:41 am Tuesday 20 February):

Cyclone Gita is currently undergoing extra-tropical transition, and has been re-classified as ‘Former Cyclone Gita’. Although Gita is no longer a tropical cyclone, it’s still expected to significantly impact much of central New Zealand over the next 24 hours.

Heavy rain is already occurring from Taranaki southwards to the Sounds, and is expected to spread over Buller, Nelson and the remainder of Marlborough over the next few hours.

Strong winds are expected to develop early this afternoon into this evening for the entire country, with the potential for damaging wind gusts from Taranaki and Taihape south to Westland and Banks Peninsula, including Wellington.

Watches and warnings remain in effect for Strong Winds and Heavy Rain, available on metservice.com, along with your latest weather forecast.

So it looks like the top of the South Island is going to bear the brunt of Gita, in particular the Nelson and Buller areas, but with a much wider area affected.

Gita has transitioned from a tropical cyclone to a cyclone as it has headed south into the mid latitudes. Metservice blog: Tropical cyclones: extra-tropical transition

So, how does this extra-tropical transition take place? When a well-developed tropical cyclone reaches its peak in the heart of the tropics, it has an eye. The eye is often fairly cloud-free, nearly circular, and surrounded by a ring of very active thunderstorms. In the early and middle parts of their lives, tropical cyclones stand up quite vertically in the atmosphere, like large columns.

Besides encountering cooler seas, tropical cyclones heading towards New Zealand eventually come under the influence of the westerlies. The westerlies of the mid-latitudes increase in strength with height, a phenomenon known as vertical wind shear. This shear almost literally chops off the upper part of the tropical cyclone and sweeps it away, not unlike a woodcutter chopping off the upper part of a coconut tree to leave a section just above the ground (except it’s a much more gradual and subtle process). Along with the lower sea temperatures of the mid-latitudes, this destroys the positive feedback processes within the cyclone.

What remains is the former tropical cyclone’s low-level circulation, which may get carried off in the westerlies or become the focus of further development if conditions are right. Either way, tropical cyclones approaching the New Zealand area undergo drastic changes of structure and appearance as they undergo this extra-tropical transition.

Metservice Severe Weather Warning:


Heavy Rain Warning

Heavy rain may cause streams and rivers to rise rapidly. Surface flooding and slips are also possible and driving conditions may be hazardous.

Area: Nelson and Buller
Valid: 14 hours from 7:00am to 9:00pm Tuesday
Forecast: Expect 150 to 200mm of rain to accumulate in Nelson west of Motueka, and 90 to 150mm elsewhere. Peak intensities of 20 to 30mm/hr possible.

Area: Marlborough including the Kaikoura Coast
Valid: 15 hours from 7:00am to 10:00pm Tuesday
Forecast: Expect 150 to 200mm of rain to accumulate about higher ground, and 90 to 140mm elsewhere. Peak intensities of 20 to 30mm/hr possible.

Area: Wellington and Kapiti Coast
Valid: 15 hours from 1:00am to 4:00pm Tuesday
Forecast: Expect 75 to 100mm of rain to accumulate during the period. Peak intensities 20 to 30mm per hour during the morning. Further lighter rain is expected from late Tuesday afternoon to midnight Tuesday.

Area: Canterbury Plains (excluding Christchurch)and High Country, the ranges of Westland
Valid: 27 hours from 12:00pm Tuesday to 3:00pm Wednesday
Forecast: Expect 150 to 200mm of rain to accumulate during this period about Canterbury High Country, and 90 to 120mm elsewhere. Peak intensities of 20 to 30mm/hr possible about Canterbury High Country.

Strong Wind Warning

Strong wind gusts could damage trees, powerlines and unsecured structures. Driving may be hazardous, especially for high-sided vehicles and motorcycles.

Area: Taranaki, Taihape, Whanganui
Valid: 10 hours from 3:00pm Tuesday to 1:00am Wednesday
Forecast: Severe gale north to northwest winds gusting 120 km/h in exposed parts of North Taranaki, but damaging gusts of 140 km/h in exposed parts of South Taranaki, Whanganui and Taihape.

Area: Manawatu, Kapiti-Horowhenua, Wellington and Wairarapa including the Tararua District
Valid: 8 hours from 7:00pm Tuesday to 3:00am Wednesday
Forecast: Severe gale north to northwest winds gusting 120 km/h in exposed places, but 130 km/h in Wellington on Tuesday evening.

Area: Nelson and Buller
Valid: 8 hours from 2:00pm to 10:00pm Tuesday
Forecast: Severe gale east to northeast winds with damaging gusts of 130 to 140 km/h in exposed places.

Area: Marlborough including the Kaikoura Coast
Valid: 12 hours from 3:00pm Tuesday to 3:00am Wednesday
Forecast: Severe gale southeasterlies gusting 120 km/h or more in exposed places.

Area: Westland and the Canterbury High Country near the Alps
Valid: 13 hours from 12:00pm Tuesday to 1:00am Wednesday
Forecast: Severe gale southeast winds with damaging gusts of 150 km/h possible in exposed places.

Area: Canterbury from Banks Peninsula northwards
Valid: 8 hours from 7:00pm Tuesday to 3:00am Wednesday
Forecast: Severe south to southeast gales gusting 120 km/h in exposed places.

This warning will be updated by: 11:00am Tuesday 20-Feb-2018


That’s strong winds but they don’t seem out of the ordinary for gales. There is a lot of rain forecast in mid New Zealand.

RNZ: Country prepares for Cyclone Gita

The worst affected areas are likely to be Taranaki, the Kāpiti Coast, the Marlborough Sounds, Nelson, the West Coast, and the east coast as far down as Canterbury.

Grey District Mayor Tony Kokshoorn was expecting storm surges and more than 100mm of rain overnight – in an area already struggling to clean up damage from cyclone Fehi earlier this month.

Following a meeting this afternoon, the Ministry of Education directed all Buller/Grey district schools to close for two days.

Civil Defence has alerted 2000 campers on the West Coast with a special app with notifications.

Accommodation providers on the coast are also telling tourists about the cyclone.

In Marlborough, Civil Defence is asking campers, trampers and boaties to leave the area today if they can, or find themselves somewhere safe to hole up.

Heavy rain could cause slips, rapidly rising streams and rivers, and flooding, with State Highways 6, 1 and 63 potentially affected, said Marlborough Civil Defence spokesman Glyn Walters.

The Interislander ferry said sailing will be rough on Tuesday evening and Wednesday morning, but at this stage it isn’t expecting to cancel services.

The latest MetService forecasts showed the cyclone arriving a band from the west across the south of the North Island and the north of the South Island.

 

Labour moves to legalise abortion

New Zeasland’s laws that cover abortion are a sham – they are effectively largely ignored, although they make women go through a demeaning process.

But they may soon be addressed by Parliament, something that’s long overdue. Past governments have chosen to sweep the sham under a big rug.

Newsroom: Labour moves to legalise abortion

Andrew Little surprised observers today when he revealed that a draft referral on reforming New Zealand’s abortion law had been circulated to New Zealand First and the Greens. Little said today that he received a letter from Prime Minister Jacinda Ardern after the coalition was formed directing him to begin the process of reforming the law. Once the two parties give feedback, the referral will be sent to the Law Commission to make a recommendation.

Abortion in New Zealand is a crime under the Crimes Act, although the Contraception, Sterilisation, and Abortion Act of 1977 allows a woman to have an abortion if she meets certain criteria and proves her need to two physicians.

Critics argue that the current legislation is out of date, inequitable, and the cause of unnecessary distress.

Currently, abortion can be granted on the grounds that the pregnancy is a risk to the physical or mental health of the mother; that there is a substantial risk the child will be seriously handicapped; that the pregnancy is a result of incest; or that the woman is deemed to be “severely subnormal”.

In 1980, a medication called RU-486 was developed allowing non-invasive medical abortions to take place for the first time. In 1987, France became the first country to legalise medical abortions.

Thirty years later New Zealand still has unfit for purpose law.

New Zealand’s law, written three years before RU-486 was developed, stipulates that abortion must take place in a clinic. This provision, intended to prevent dangerous back alley abortions, means that patients must travel to the clinic twice, simply to take a pill. For patients in rural areas, this can be a long and expensive exercise.

Dr Christine Roke, National Medical Advisor to Family Planning, said the added steps were a barrier to best practice.

“It adds time and it adds cost,” said Roke.

New Zealand is an outlier among OECD countries for the time it takes to get an abortion and the way abortions are provided to patients.

In New Zealand, a patient must be referred to two specialists to sign-off on the abortion. If one refuses, the woman may need to find a third specialist. The average time from referral to procedure is 25 days.

In New Zealand, only 15 percent of abortions are medical abortions. By contrast, 62 percent of abortions in the UK are medical abortions and 45 percent of abortions performed before nine weeks (two-thirds of the total number) in the United States are medical abortions.

We are a long way behind the times on this.

During the election campaign, Prime Minister Jacinda Ardern expressed her personal view that should abortion be taken out of the Crimes Act so it is likely that this will form some part of the reform.

On Tuesday, Andrew Little refused to give much detail on what reform might look like, but suggested it might be broader than taking abortion out of the Crimes Act.

“There are more issues than just what’s in the Crimes Act … it’s also the hurdles that have been put in the way of women who are faced with making that decision,” he said.

The vote would be a conscience vote, meaning MPs would be given the ability to vote freely without following a party line. Reform is likely to be supported by the Prime Minister, liberal members of her party and the Green Party.

It would also require support from some NZ First and/or National MPs if it is to progress New Zealand abortion laws and practices into the 21st century.

 

Cyclone Gita warning – “highly impactful” likely in NZ

Metservice Severe Weather Outlook

Cyclone Gita is expected to approach New Zealand from the northwest early next week.There remains uncertainty with regards to the speed and track of Gita, but the passage of this system across New Zealand on Tuesday and Wednesday is likely to bring a period of highly impactful severe weather.

There is high confidence of severe gales and heavy rain spreading across central and northern New Zealand on Tuesday and Wednesday.

In addition, winds associated with Gita are likely to cause large waves to affect some coastal places, and the expected storm surge allow run-up of waves in some low-lying coastal places, particularly at high tide.

map showing severe weather outlook

NZ Herald – Cyclone Gita: MetService warns ‘it’s best to prepare’

MetService is urging people to prepare for Cyclone Gita as it makes its way to New Zealand.

Risk areas are yet to be identified- they will be earmarked closer to Gita’s arrival – but MetService says the tropical cyclone is likely to bring with it “highly impactful severe weather”.

WeatherWatch has advised people to postpone any non essential outdoors activities on Tuesday and Wednesday, especially hikers and trampers.

People are asked to check their emergency kits are up to date with enough food, water, batteries and cellphone chargers.

Gutters should be cleared in preparation and pets should be provided for too.

NIWA meteorologist Chris Brandolino said it would be a fast-moving ex-tropical cyclone.

“New Zealand looks like it will get an impact, but the question remains over whether it will be more of a central North Island event, or is it going to be more of an upper South Island kind of event.

“The more reliable models are pegging the Kāpiti Coast up to the Taranaki region, east to southern Hawke’s Bay and down to the Wairarapa but that doesn’t exclude other areas”.

Cyclocane: Gita Tracker

NZ Herald: Everything you need to know about Cyclone Gita including how it might affect NZ

 

From Waitangi’s Waitangi Day to New Zealand’s Waitangi Day

National MP Nuk Koraka explains Why Bill English and I went south for Waitangi Day

By using our national day to engage with iwi from all over the country, we send a message that we’re serious about the spirit of the Treaty instead of being where there will be the most cameras, writes Nuk Korako, National’s spokesperson for Māori Development

Waitangi Day is a day for discussion; a day for remembering; and a day for moving forward not, as some believe, a day for highlighting divisions. Waitangi Day should be – and for most of us is – a day to look back at what has been and come together to look at what can be.

This year, I joined Bill English for Ngāi Tahu’s Waitangi Day celebrations at Te Rau Aroha Marae in Awarua. The decision to go south this year was based on our belief that Waitangi Day is a day important to all Māori across New Zealand, and was in no way a slight on Ngāpuhi, as some have suggested.

The rich history and tikanga felt within the Treaty Grounds made it an undeniably special place to spend Waitangi Day.

We must always remember, the Treaty has signatories across the country, so it is only right to travel to those places like Awarua, in acknowledgement of that. As did our National Party members who attended Waitangi this year. Bill, I and a number of our colleagues spent the day engaging and discussing the progress and the work still to do between the Crown and iwi across New Zealand.

Iwi everywhere have their own stories of the Treaty and what Waitangi Day means to them and that includes Ngāi Tahu. One hundred and seventy eight years ago, on 10 June 1840, Ngāi Tahu Rakatira John Tuhawaiki, Kaikoura Whakatau, and Te Matenga Taiaroa signed the Treaty of Waitangi on Ruapuke Island just across from Awarua. Iwikau and Hone Tikao had previously signed at Akaroa on 30 May. Hone Karetai and my tipuna Korako were to sign in Otago on 13 June 1848.

The Tiriti o Waitangi was a nationwide agreement. Waitangi Day is overwhelmingly focussed on the place it was first signed, Waitangi, while most of the rest of the country largely ignores it, apart from some enjoying a public holiday for some.

By using our national day to engage with iwi from all over the country, we send a message that we’re serious about the spirit of the Treaty instead of being where there’ll be the most cameras.

The Treaty, to other iwi in New Zealand, does not begin and end at Waitangi. The Treaty is not about a place – it’s about people.  It’s not a location – it’s an agreement. And it was an agreement made with a large number of Rakatira across a number of different locations. And the debates that were held in those various locations were as deep, hot, and contentious as the ones that occurred at Waitangi all those decades ago.

Bill’s decision to spend Waitangi in Awarua is not a rejection of Ngapuhi or of others who attend Waitangi. It’s about the rest of the iwi of Aotearoa whose men and women signed the treaty 178 years ago.

The history of protest at Waitangi, and the actions of protesters in drawing attention to themselves is a feature of that part of the country. It does not and never has represented the celebrations that occur in other parts of Aotearoa.

From Ōrākei in Auckland to Awarua in Bluff and even across to the Chatham Islands, February the 6th is a day of whānau, community, and a coming together of Māori and Pākehā to celebrate an event that defines us as a nation.

If Waitangi Day is ever to be recognised as a significant national day then it needs to be embraced and celebrated around the country.

Jacinda Ardern got a lot of positive press for her five day effort in Waitangi, and may have been the catalyst for a new era of recognising Waitangi Day.

But Koroko and English have made an important point.

To really come of age the treaty needs to grow from being Waitangi’s Waitangi Day to being New Zealand’s Waitangi Day.

Will that ever happen?

 

Ardern at Waitangi

In the little I heard about Jacinda Ardern’s speech at Waitangi yesterday – remarkably the first time a woman has been allowed to speak on the occasion – she seems to have been thoughtful, sensible and engaging.

She said she would continue to engage over several days at Waitangi in future years. That’s fine, but she could do with remembering even the treaty toured the country.

RNZ – PM to Māori at Waitangi: hold govt to account

Prime Minister Jacinda Ardern has delivered an historic speech at Waitangi, standing on the porch of the whare rūnanga.

Ms Ardern delivered her speech during the formal welcome – a first for a female prime minister – touching on the future, her hopes for her child, and her hopes for the future of Crown-Māori relations.

She said she did not take lightly the privilege extended to her to speak from the porch, as a Prime Minister and as a woman. She said she was particularly proud to stand alongside the largest contingent of Māori MPs in the Labour party, and each and every one of them represented their people, she said.

 

“As a government we have been here for five days. We did not come simply for the beauty and hospitality of the North. We came because there is work to do, much mahi to do and we will only achieve what needs to be done together.

“So in this five days we have talked about education, health, employment, roads, housing. But now we must take the talk to action. This is the beginning for our government and I thank you.”

“We have to also start thinking as a nation of what extends beyond the negotiating table. That is not the end of our relationship nor is it the end of the Crown’s responsibility.

“We created the portfolio as an acknowledgement that our relationship goes beyond the negotiating table.”

“My first time here I was probably no more than 7 years old.

“My father brought his two daughters to the treaty grounds … he wanted us to learn the history of the place we were living and lucky enough to call home.

“I can’t help think of the kinds of things I would want my child to think about as they come on to these grounds and to this place. My hope is that they know this place’s history. That they know of the 28 October and the declaration of independence.

“My hope is that they would know of the history of [Waitangi] and those stories may be hard to hear but I am certain they are even harder to tell. That is our history and we must always be honest about our history.”

“I hope that they know the value of kaitiakitanga – that we have a role as guardians of our environment … and I hope they know that we value the ability to speak frankly and openly to one another – kanohi ki te kanohi – face to face.

“We should never shy away from that because if we don’t speak freely how do we change?

“If we value that about ourselves as a nation 364 days of the year, why would we not value it here at Waitangi? Speaking frankly and openly is not a sign of failure, but a sign of the health of our nation.

“I also hope that my child will know that we have the power to change and we must change.

“We as a government, we know what we have to do. We know all of the failings that we have as a nation but we won’t always know exactly how to change it.

“There will be no marae too small for us.

“So when we return in one year, in three years, I ask you to ask of us ‘what have we done?’ Ask us what we have done to improve poverty … ask us, hold us to account.

“Because one day I want to be able to tell my child that I earned the right to stand here, and only you can tell me when I have done that.”

Speaking to Morning Report, Ardern said she felt like she had been given the privilege of being a part of history.

New Zealand and China in a Fractured World

Michael Powles, retired New Zealand diplomat and a Senior Fellow in the Centre for Strategic Studies at Victoria University, writes at Incline: New Zealand and China in a Fractured World:


There can be no doubt that the international environment in which New Zealand will have to operate in the decades ahead will be enormously more difficult than the environment we’ve been used to. The facts pointing to China’s coming economic preponderance and the political power that will give it, regionally and globally, seem indisputable.

Nevertheless, a few observers seem to believe that if several other countries act together, under US leadership, China’s power could somehow be contained. I believe that they are simply ignoring clear facts. Perhaps there is an element of wishful thinking. “Past policies have been successful – let’s just continue them.”

The effort being put into trying to contain or counter China will be worse than wasted. Logically, it can’t be successful beyond the short term.

…the geopolitical landscape facing New Zealand grows daily more daunting.

On the one hand, we will continue to depend on China for our prosperity. On the other, our traditional security partners, Australia and the United States, seem intent on trying to constrain or restrict China, and reports suggest they may be pressuring New Zealand to join them.

For obvious economic reasons and also some arguments of principle encapsulated in what we call our independent foreign policy and our support for multilateralism, there seems to be a sensible reluctance in New Zealand to join a bloc lining up against China. But what then should we do to prepare ourselves for the coming geopolitical upheaval?

I believe our effort needs to be directed to developing the already strong relationship with China to increase the prospects for New Zealand to have influence with China as it wields increasing regional and global power.

 – – –

In short, the geopolitical earthquakes facing us today mean we need to find ways of doing more to increase our ability to influence Beijing.

The kind of more deliberate discourse between the two governments which I suggest could be acknowledged by the two governments as a valuable, indeed a vital element in our relations. This would give it a higher priority in the relationship.  Possibly it could be institutionalised, so long as that did not lead to frankness being replaced by formality.

These discussions would be valuable both for the bilateral relationship itself and in building public support for the relationship.

Acknowledging the importance of these sensitive topics would make having the discussions easier. As a result, a relationship which is increasingly vital to our future, could be stronger and better able to survive the coming geopolitical earthquakes.

Nippert on Citizen Thiel

For your consideration: 6000 words on how Peter Thiel courted, then ghosted, New Zealand. Feat: ex-Minister raising prospect of political pressure, driving convictions, a panic room, and the first (brief) comment from the man himself.

I’m also opening up most of my documentcloud folder on the case, a collection of OIA replies from Internal Affairs, Immigration NZ and the NZVIF.

https://www.documentcloud.org/public/search/projectid:31337-Citizen-Thiel

And, please take time to watch the videos of interview with Dunne and Drury: They’re really good and the pair are key voices in this saga.

Also, if you actually get to the end of the story, please let me know. what you think I spent a year on-and-off reporting it, and it’s the longest thing I’ve ever written. My nervous anxiety is that of an intern awaiting their first byline.

Super moon but not a blue moon

If Wednesday night is clear we get a chance to look at a reasonably special astronomical event close to us.

RNZ: Super blue blood moon eclipse on the cards

Three unusual lunar events will coincide on Wednesday night: a blue moon, a super moon and a blood moon.

A super moon is when the moon gets the closest to earth.

And a blood moon or total lunar eclipse happens when the earth, sun and moon are all lined up, making the moon appear red.

Physics professor Richard Easther of Auckland University said even for someone in his profession, it was going to be a special event.

“To be corny, it’s a majesty of the heavens…I don’t want to wax too poetic but the same human instincts that makes the sky cool for everybody certainly works for astrophysicists.”

Of course much will depend on what the weather is like on Wednesday night. The Dunedin forecast is currently for late rain and increasing cloud (and 33 degrees), and Auckland is also for cloud increasing, so prospects aren’t good.

It’s a reasonably rare calendar event.

It will be the first time a super blue blood moon has occurred on the same night since 31 March,1866.

But technically in New Zealand it won’t be a ‘blue moon’.

A ‘blue moon’ is just a calendar quirk, as is New Zealand’s time zone.

Banker warns of financial bubble risks

Since recovering from the Global Financial Crisis in 2008 and the impact of the Christchurch earthquakes the economy has been humming along nicely in New Zealand for the last couple of years, allowing for political promises of increased spending. Some caution may be prudent.

However the world economic risks have risen – President Donald Trump claims to have lifted the US stock market and business confidence, but a world banker claims there is a bubble that is at risk of bursting.

NZH – Breaking point: World financial system as stretched as before 2008 crash, says banker

The world financial system is as dangerously stretched today as it was at the peak of the last bubble but this time the authorities are caught in a “policy trap” with few defences left, a veteran central banker has warned.

Nine years of emergency money has had a string of perverse effects and lured emerging markets into debt dependency, without addressing the structural causes of the global disorder.

“All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,” said William White, the Swiss-based head of the OECD’s review board and ex-chief economist for the Bank for International Settlements.

Prof White said disturbing evidence of credit degradation is emerging almost daily.

Prof White said there was an intoxicating optimism at the top of every unstable boom when people convince themselves that risk is fading, but that is when the worst mistakes are made. Stress indicators were equally depres-sed in 2007 just before the storm broke.

This time central banks are holding a particularly ferocious tiger by the tail. Global debt ratios have surged by a further 51 percentage points of GDP since the Lehman crisis, reaching a record 327 per cent (IIF data).

“Central banks have been pouring more fuel on the fire,” he told The Daily Telegraph, speaking before the World Economic Forum in Davos.

The US Federal Reserve is already reversing bond purchases – ignoring warnings by former Fed chair Ben Bernanke – and will ratchet up the pace to US$50b a month this year. It will lead to a surge in supply of US Treasury bonds just as the Trump Administration’s tax and spending blitz pushes the US budget deficit toward US$1 trillion, and China and Japan trim Treasury holdings.

It has the makings of a perfect storm. At best, the implication is that yields on 10-year Treasuries – the world’s benchmark price of money – will spike enough to send tremors through credit markets.

The world economy is always at risk of catastrophe. There are always people predicting imminent financial collapse.

The edifice of inflated equity and asset markets is built on the premise that interest rates will remain pinned to the floor. The latest stability report by the US Treasury’s Office of Financial Research warned that a 100 basis point rate rise would slash US$1.2 trillion of value from the Barclays US Aggregate Bond Index, with further losses once junk bonds, fixed-rate mortgages, and derivatives are included.

The global fall-out could be violent.

If that happens it will impact on New Zealand. If interest rates rise or property prices fall it will create difficulties many property owners. If interest rates rise and property prices fall the damage will be greater.

While higher inflation is needed in one sense to right the global ship – since it lifts nominal GDP faster, and whittles down debt – the danger is that the shock of higher rates will hit first.

Central banks are now caught in a “debt trap”. They cannot hold rates near zero as inflation pressures build, but they cannot easily raise rates either because it risks blowing up the system. “It is frankly scary,” said Prof White.

The authorities may not yet have reached the end of the road but this strategy is clearly pregnant with danger. Global finance has become so sensitive to monetary policy that central banks risk triggering a downturn long before they have built up the safety buffer of 400 to 500 basis points in interest rate cuts needed to fight recessions.

“We are running out of ammunition. I am afraid that at some point this is going to be resolved with a lot of debt defaults. And what did we do with the demographic dividend? We wasted it,” he said.

Financial hiccups are inevitable, it’s just a matter of when and how drastic.

The New Zealand Government has committed to ‘fiscal responsibility’ – it may be wise for them to stick to that aim.