around farm emissions<\/a>, we had the EU [Trade] Commissioner come down and say he knows New Zealand\u2019s meeting its obligation, he doesn\u2019t have any problem at all with what we\u2019re doing, and it\u2019s for us to work through, and so that is an endorsement of the sound decisions the Government\u2019s making.\u201d<\/p>\nSingapore, Chile and New Zealand have a history of breaking new ground on trade, as McClay points out: GEPA\u2019s twin DEPA (the Digital Economy Partnership Agreement, signed in 2020) is the world\u2019s first digital trade pact, while the CPTPP agreement stems from the P4 trade deal inked between the trio and Brunei in 2005.<\/p>\n
The latter is arguably the most successful example of an initially small-scale deal reaping outsized rewards. There are currently 12 nations in the bloc and many more keen to sign on, South Korea signalling its desire to join and Indonesian ministers also talking up their interest before Luxon sat down with the country\u2019s president Prabowo Subianto on Friday.<\/p>\n
\u2018You never start with 21 countries from day one with it all perfectly worked out \u2013 you actually need to go on a journey of an idea that turns into a start, that turns into gets grown and gets built.\u2019<\/p>\n
Christopher Luxon<\/p>\n
Such \u2018incubator agreements\u2019 are becoming increasingly popular, given the difficulty of reaching consensus through multilateral bodies like the World Trade Organisation.<\/p>\n
However, Luxon sees their proliferation as less an indictment of the international trade order and more about the benefits of small countries coming together to think outside the box.<\/p>\n
\u201cIdeas are birthed with a few countries that actually have some energy for it, and then others get attracted to it\u2026<\/p>\n
\u201cYou never start with 21 countries from day one with it all perfectly worked out \u2013 you actually need to go on a journey of an idea that turns into a start, that turns into gets grown and gets built.\u201d<\/p>\n
Such pragmatism may be necessary given the state of the system: opening Apec leaders\u2019 talks on Friday, South Korean President Lee Jae Myung said the world was at \u201ca critical turning point as the international order undergoes rapid transformation\u201d.<\/p>\n
\u201cThe free trade order is facing sweeping changes and global economic uncertainty is intensifying, and the momentum for trade and investment is weakening.\u201d<\/p>\n
While all countries could not always share the same position as they acted in their own national interests, Lee said they could \u201cstand together before the ultimate goal of achieving shared prosperity\u201d.<\/p>\n
The latest edition of Apec\u2019s regional trends analysis, released as leaders gathered for the first round of discussions, did not exactly bring good news for Luxon ahead of next year\u2019s election.<\/p>\n
Economic growth in the Asia-Pacific region is projected to slow in 2026, dropping from 3.1 percent this year to just 2.9 percent in the face of rising public debt and weaker trade performance.<\/p>\n
The report\u2019s co-author Glacer Ni\u00f1o A. Vasquez says much of this year\u2019s trade momentum has been driven by businesses rushing to export before tariffs and other new restrictions could take effect.<\/p>\n
The fiscal constraints facing the wider Apec membership will be familiar to Luxon and many New Zealanders: gross government debt is projected to exceed 110 percent of GDP, \u201ca significant increase from earlier forecasts\u201d, thanks to lingering pandemic-related spending, slower revenue recovery and the costs associated with ageing populations.<\/p>\n
\u201cRising debt is eroding fiscal space just as economies need to invest in innovation, infrastructure and human capital, especially as aging populations require higher spending on health, pensions and social services,\u201d the report\u2019s other co-author Rhea C. Hernando says.<\/p>\n
Luxon is not taking a fatalistic approach to the forecasts, saying they provide an \u201cimperative\u201d for leaders to shape the economic system as much as possible.<\/p>\n
\u201cWe\u2019re all struggling with economic challenges that are different [for] each individual country, we\u2019re obviously dealing with a different trading environment than what we\u2019ve had in recent times, but regardless of that, there was huge unity around, \u2018Actually, we need to come together, work together, reinforce and reaffirm the rules-based system\u2019.\u201d<\/p>\n
With Apec leaders wrapping up talks on Saturday, all eyes are on whether that unity can be transformed into action.<\/p>\n","protected":false},"excerpt":{"rendered":"As citizens of a small, remote island nation, New Zealanders are more than accustomed to others having no…\n","protected":false},"author":2,"featured_media":111759,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,79983,111,43,7439,139,69,584],"class_list":{"0":"post-111758","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-foreign-affairs","11":"tag-new-zealand","12":"tag-news","13":"tag-newsroom-pro","14":"tag-newzealand","15":"tag-nz","16":"tag-trade"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/111758","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=111758"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/111758\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/111759"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=111758"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=111758"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=111758"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}