OLIVER HARTWICH: New Zealand’s new reality
- Administrator
- Feb 9
- 2 min read
For the first time since the Second World War, New Zealand is being asked to make major economic decisions under direct threat from an ally.
New Zealand is negotiating a minerals deal with the United States. On Tuesday, Secretary of Foreign Affairs Bede Corry met US Deputy Secretary of State Christopher Landau in Washington. A joint statement confirmed talks on a “critical minerals framework”. The talks are moving fast.
Critical minerals are the raw materials in batteries, electronics, electric vehicles and weapons systems – lithium, rare earths, that sort of thing. America wants secure supplies from allies rather than China. Fair enough. But the way Washington is going about it is something else entirely.
In January, the White House gave trading partners 180 days to strike deals or face import restrictions, including tariffs. The deadline expires in July. This is not negotiation in any traditional sense. It is a deadline backed by the threat of punishment.
For decades, that is not how allies dealt with each other. Negotiations took time. Pressure, when applied, was discreet. Agreements stuck. That world is gone.
What Washington wants now is fast compliance. The old courtesy of partnership has given way to something that looks more like extraction.
Australia has already discovered what this means in practice. In October, Canberra signed an $8.5 billion minerals deal and the mining industry celebrated. The agreement included American guarantees of minimum prices, so that if China flooded the market with cheap supply, Australian mines would still be worth the investment.
Last week, those guarantees were quietly withdrawn.
Australia played by the rules. It moved quickly, signed a big deal and trusted that the relationship would hold. It now carries the risk on its own.
This matters because New Zealand is next in line. We share intelligence ties and decades of close cooperation with the United States. None of that changes the calculus. We are not negotiating because the terms are attractive. We are negotiating because the alternative is worse.
Even full compliance offers limited security. Australia had scale, existing mines and deep defence ties through AUKUS. Yet its protections still evaporated within months. New Zealand has far less to bargain with.
The assumptions we have long relied on no longer apply. What gets agreed today can be revised tomorrow, and when it is, there is no appeals process.
This is the new reality. We had better understand it soon.
Listen to Oliver and Eric's podcast here for a deeper discussion. Oliver Hartwich is Executive Director of the NZ Initiative. This article first appeared in their weekly newsletter.
No difference to what IWI are trying to do to this country, they are wanting the land, the water, probably the air and gravity if they could.
Seriously what have we got ? Vanadium - extracted from the steel mills from the iron sands - love to get a good price for that.
Antimony - Probably not worth while extracting, not economic
Rare Earths - pass. Galladium, Neobium - good luck.
There really is no decent size resource in this country unless you are looking at deep sea mining. - try opening that can of worms.
Talk, take the money and make all the promises you want, the cupboard is bare.
Oliver’s comment confirms to me that so-called democracies around the world are a shambles, as-is the United Nations. While the USA may currently appear to be the rabid dog in the room, other democracies – including our own – are not functioning at all well. I think this deplorable state of affairs has been reached because of decades of emphasis on commercial competition and the development of strong leaders. The end result is Donald Trump in the USA and would-be-Trumps jockeying for position in other countries.
For humanity to survive both trade wars and real wars, we somehow have to figure out how to move from a “competition-focus with big egos” to a “cooperation-focus with small egos”. While it…
A bit off topic but, on the medal table on sky opens coverage of the winter olympics NZ is referred to as aotearoa. Absolute treason, how can this be allowed to happen????????????????
Andy Espersen comments,
But the NZ Government will NOT contribute any cash for the investment - and will receive no profit from the mining either (unless separately agreed to by the investors).
The mining companies will bear the risk - so why worry??.
“What gets agreed today can be revised tomorrow”
My assumption is that China plays the long game and will be aware of US tactics here and NZ’s response. This is one instance where asute and discrete relationship management with our largest trading partner may play out in NZ’s favour, despite the known risks.