Trade minister Damien O’Connor is at the World Economic Forum summit in Davos this week. The summit is being impacted by the same geopolitical fractures that will frame global affairs for us this year, writes Anna Rawhiti-Connell in this excerpt from The Bulletin. To receive The Bulletin in full each weekday morning, sign up here.
O’Connor packing light but carrying a a big agenda to Davos
Minister for trade and export growth Damien O’Connor is in snowy Davos this week at the World Economic Forum summit. No doubt there’s value in O’Connor being there. As the Herald’s Fran O’Sullivan reports (paywalled), he’s packing light (carry-on only), having observed the “huge piles of bags” at airports, but has a big trade agenda. This year, however, a number of world leaders are skipping Davos. Politico has a very good run-down on who is not going and the waning significance of the annual summit. It’s a good jumping off point to go a bit global this morning.
Cooperation in a fragmented world vs an era of protectionism
The theme of Davos this year is “cooperation in a fragmented world” but as the Financial Times’s Gideon Rachman highlights, that fragmentation is one of the reasons the forum is losing ground. Rachman echoes the very strong statement made by The Economist in its cover story last week (payalled but you can see a preview), writing that “geopolitics threatens to destroy the world Davos made”. The Economist called the current move towards protectionism, subsidies and export controls a “destructive new logic that threatens globalisation”. Here at home, it’s in step with a piece Pattrick Smellie wrote last year (paywalled) proclaiming the era of free trade to be dead.
New Zealand to host CPTPP event in July
In July, New Zealand will host the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Commission –the biggest international trade event to be held here in a while. O’Sullivan also spoke with O’Connor about his ambitions for the event (paywalled).
Trade with CPTPP countries represents 27% of NZ’s total trade. There is always hope that the US will rejoin the CPTPP, but many commentators think that’s a pipe dream. We continue to engage with the US via the Indo-Pacific Economic Framework for Prosperity (IPEF) while the US continues to shore up its presence in the Pacific, hoping to curb China’s influence in the region. Newsroom’s Sam Sachdeva takes a look at where US/China tensions may head this year. The US announced yesterday it would reopen its embassy in the Solomon Islands, while Fiji’s new government appears to have some contradictory views on how close it would like ties to be with China.
Covid, China and the world’s next frontrunner for most populous country on earth
China remains our largest trading partner and the prime minister said at the end of 2022 that she hoped to visit this year. That may depend on how China’s ongoing Covid outbreak tracks. The country’s actual and economic health remain high on the list of global concerns along with the ongoing war in Ukraine. A forecasting firm full of superforecasters (that’s a job) doesn’t see that conflict ending until after October 2024 (paywalled). Infometrics economist Brad Olsen says that the predicted recession “could go longer and stronger because of how weak the Chinese economy is starting from”. While China is reopening, it’s also just experienced its first population decline in more than 60 years. It’s expected that India will overtake it as the most populous country on earth. Stuff’s Dileepa Fonseka has a good read on why we’re so far behind Australia in forging a trading relationship with India.