The times they are a-changing: Brian Lynch reviews New Zealand's options in an increasingly volatile international environment.

• Author: Lynch, Brian

Bob Dylan's hit tune of the mid-1960s has lyrics as prophetic today as 50 years ago. Together with other turbulent issues, the Brexit outcome and President Trump's victory have disturbed what had been a largely stable and predictable world. This has unsettled the established rules about how nations manage their relations with each other, and applied pressure to the economic and security architecture that guided the post-war global order. In this unfamiliar, fluid setting, New Zealand must continue to protect its core interests, have its concerns heard and to do so maintain access and exert influence. Much political engagement and policy activity is underway to that end.

**********

Living in New York at the time, I can distantly remember a hit tune that Bob Dylan released in 1967. One of its memorable verses has striking resonance:

Come senators, congressmen, Please heed the call. Don't stand in the doorway, don't block the hall. For he that gets hurt, Will be he who has stalled. There's a battle outside. And it is ragin'. It'll soon shake your windows. And rattle your walls. For the times they are a-changin'. That was indeed a turbulent period, but Dylan's lyrics seem as prophetic today as they were 50 years ago.

In the early 2000s our then Prime Minister Helen Clark could rejoice that New Zealand enjoyed a 'benign' external environment, one that was untroubled and predictable. By any measure the unsettled times we now live in represent truly uncharted waters, stirred by a seemingly insatiable appetite for disruptive change. The largely stable world we have known for decades has lost much of its equilibrium, at least short-term. In the recent past it has suffered a double body-blow. First the Brexit decision that caught most of us by surprise. Its long-term implications for Europe and Britain are only beginning to appear. Then Donald Trump won the US presidential election. For most of us, that was an even more disconcerting outcome than the Brexit vote.

In its early months in office the new Washington administration has been faithful to the campaign rhetoric that foreshadowed it would not be bound by established rules and ways of doing things; nor accept uncritically the institutional economic and security architecture that has guided the post-war global, rules-based order. President Trump's first executive action was to pull the United States out of the Trans-Pacific Partnership. He has said he will renegotiate NAFTA and review other trade agreements to which the United States is a party; limit migration and build a wall with Mexico; lift defence spending but redefine the nature and content of US security commitments, including with a NATO he described as 'obsolete', reject climate change undertakings and revisit the Iran nuclear deal; treat the European Union more remotely; and bring Russia in from the cold.

That avowed Washington agenda, if persisted with, would have implications on a seismic scale. Coupled with it, we see the continuing rise of China, already the world's second-largest economy and determined to assert its presence in contested waters nearby. A resurgent Russia is set on reclaiming past glory and demanding recognition. A newly pro-active Japan has rewritten its constitution to abandon the constraint of keeping armed forces solely for self-defence. A recalcitrant North Korea continues to build its missile capability, intent on rattling the nerves of its close neighbours. There is accelerated defence spending in South and South-east Asia. North African and Middle East affairs continue on their messy path with no end in sight, contributing to an international humanitarian crisis of historic dimension.

As for Europe, alongside Brexit other palpable threats exist to the 'European Dream'. They appear to defy what many of us believed was the march of history. What future does the Eurozone have? The single most successful political and economic integration model in world history appears at risk of unravelling. Hopefully not, but it has to be said the anti-establishment, populist sentiments that swept Brexit along and brought President Trump to office are also starkly evident on the continent. They are serious factors in this year's elections. Moderate forces were successful in the Netherlands. Interest now focuses on France and Germany; Norway too.

Serious downturn

If all that was not hair-raising enough, there is a serious downturn in world trade, with growing unemployment in many countries. There has been a surge in protectionist trade measures that target imports. Measured by their declining annual profits, the boom years for a lot of global firms are behind them. In most developed economies, China too, the growth in gross domestic product has now exceeded the...