The big questions that come with Clinton

Having a trader as Prime Minister can work a treat: snip some workers’ rights here, tax breaks there, a bit of lolly and, hey presto, a film, jobs and tourism ads. Now, will trader John Key do the truly big stuff when Clinton 2 jets in?

The last National Prime Minister who met a Clinton here — Jenny Shipley with hard-dog-to-keep-on-the-porch Bill — went a little kittenish in his aura. Hillary doesn’t do kittenish and Key is a regular bloke. They have a lot to talk about in today’s altered world order.

The proposed forward-focused restatement of the relationship includes nuclear non-proliferation (the ships issue was sorted years ago), climate change and South Pacific cooperation.

Also a hot topic: the trans-Pacific partnership (TPP), in which the P4 (Brunei, Chile, New Zealand and Singapore) might form a big free trade area with Australia, Malaysia, Peru, the United States and Vietnam.

This is down John Key’s foreign-policy-is-trade line (in which Tim Groser far outranks Murray McCully). The TPP is a back-door route to the United States FTA Mike Moore first mused on in 1984. More important, it could lay foundations for an Asia-Pacific bloc of potentially enormous economic power.

Whether the United States can do the TPP may depend on the complexion the Congress after next week’s elections. The Republicans are expected to win a majority in the House and prune the Democrats’ Senate majority.

The complication is that the Tea Party has secured a number of Republican nominations. The Tea Party represents resentment, some of it aimed at influences believed to have corrupted or undermined traditional United States values. They are unlikely free trade enthusiasts. Moreover, recent polling showed 53 per cent of Americans believe FTAs have harmed their country, up from 32 per cent in 1999.

If this mood catches on — say, with a Tea Party-backed President in 2012 — that could turn the United States inward, with profound implications for the emerging world order.

This goes far beyond trade. Key’s predecessor understood that foreign policy was much more complex. The multilateralist foreign policy she ran was a factor — some say the determining factor — in securing the FTA with China.

There are signs Key is beginning to get this. In advance of a pre-visit catch-up with Clinton in Hanoi he said he would raise the Middle East, North Korea and China’s territorial ambitions for islands in the seas to its east and south, which have in the past month generated a standoff with Japan and tension with Vietnam.

This reflects China’s growing assertiveness which in turn reflects its strengthening economy and accompanying self-confidence. China’s huge trade surpluses and vast reserves are critical factors in the United States’ attempts to refloat its beached economy: hence the United States’ desperate bid in the G20 for agreement to limit trade surpluses, which depends heavily on China letting its currency appreciate. China is doing that at an unhurried, China-centred, pace that even includes backward steps.

China has a China-centred take on climate change (just as does the United States, where legislation is blocked): it is pursuing renewable energy and energy efficiency because not to do so would limit its capacity to enrich its people. As a backstop it is securing land and access to resources in poor countries, including in the South Pacific.

And it is building a powerful navy. The majestic Middle Kingdom empire is back in business.

Smaller nations on China’s periphery are uneasy, none more than Singapore.

Simon Tay, chair of Singapore’s Institute of International Affairs, in a new book, Asia Alone: The Dangerous Post-Crisis Divide from America, says Asia is coming together more as a region and United States’ dominance is ending. What role will the United States play in relation to this new Asia and can it act in a way that both counterbalances China and avoids open conflict — or will it retreat from Asia and turn inward?

In a speech in Wellington last month Tay worried that “Asia may end up too centralised on China”. The United States was critical to the region’s economic welfare and the guarantor of stability, he said. Tay foresaw a period of tensions, including between India and China.

These are important and challenging issues for New Zealand’s foreign policy. New Zealand is drawn into Asia through trade, migration and security and increasingly is seen by economic, and to some extent other, commentators as part of Asia. It was fast-tracked by Asian countries on to their side of the table in last month’s Europe-Asia summit in Brussels. But most New Zealanders are kin to the United States, heirs to Judaeo-Christian and Enlightenment values.

New Zealand’s nightmare would be to be forced to take sides because China and the United States can’t manage their tensions. It is a nightmare the defence review due out soon needs to have addressed. It will be the shadow on the wall when Key and Clinton talk this week.