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World
Sam Sachdeva

How the US midterms will affect NZ

As American voters head to the polls, their decisions could yet shape the economic and political environment in New Zealand. Photo: Getty Images

The impending midterm elections in the United States have largely flown under the radar in New Zealand, but the result – and whether it is accepted – could yet have significant consequences for US leadership in the Indo-Pacific and the wider world, Sam Sachdeva writes

Analysis: As New Zealand draws ever closer to the next general election, Kiwis are understandably more focused on political manoeuvrings close to home than on those further abroad.

Many column inches have been devoted to (baseless) speculation about Jacinda Ardern stepping down as prime minister before Kiwis head to the polls next year, as Labour continues to lose ground to National and its leader Christopher Luxon.

But on the other side of the world, Americans are casting their ballots in midterm elections on Wednesday (NZT) which could shape how the next two years unfold for New Zealand and the world.

With two years left in Democratic president Joe Biden’s first term, the Republican Party is all but certain to regain control of the House of Representatives while the Senate is on a knife edge.

That will mean an end to the majority currently enjoyed by Democrats in both chambers of Congress, which while wafer-thin has allowed Biden to push ahead with climate and infrastructure legislation in the face of political opposition.

Concerns about the cost of living, skyrocketing inflation and interest rates are as much of a concern in the United States as they are in Aotearoa, and the fate of Democratic incumbents blamed for the negative economic situation may yet foreshadow how Ardern and Labour fare in 2023.

Divided government has become increasingly common in recent decades, and foreign policy is largely the preserve of the White House rather than Congress, which suggests there may be little in the way of short-term consequences for New Zealand.

Consensus on 'talking tough' with China

Some commentators actually believe a Republican victory in the midterms could actually reduce rather than increase polarisation on some aspects of foreign policy.

Centre for Strategic Studies director David Capie sees the Washington-Beijing relationship as an area for clear cooperation, with a desire to talk tough “just about the only thing Democrats and Republicans can agree upon”.

“It’s more likely we’ll see a further ratcheting up of competition with China in areas like trade, technology, and over Taiwan. Some of those policies – calls for decoupling or bringing back jobs from Asia – obviously play well in the current economic climate.”

Capie says there is also speculation Republicans might help Biden to “put some meat onto the bones” of the Indo-Pacific Economic Framework, an effort to counter China’s economic heft in the region which has faced criticism for a lack of meaningful trade commitments.

“I’m still sceptical there is any appetite for anything that would look like a meaningful trade deal to much of the region. But it's equally clear the lack of an economic vision remains the weakest link in the US's approach to the Indo-Pacific, so everyone will be watching closely for any sign there might be a window for a change in approach before the next election campaign kicks off.”

Such a change of tack would be warmly welcomed by New Zealand, which was on the cusp of improved exporter access to the US through the Trans-Pacific Partnership before Donald Trump withdrew the country from the trade deal in 2017.

“Regardless of who is democratically elected, if they are in a robust electoral environment you would always hope for the strength of those democracies that the transition is as seamless and peaceful as it could be.” – Prime Minister Jacinda Ardern

It isn’t just the election itself which is attracting the scrutiny of many, but what happens afterwards.

According to FiveThirtyEight, 60 percent of Americans will have the chance to vote for a candidate who has denied the legitimacy of Biden’s defeat of Trump at the 2020 election.

There are fears other Republicans will similarly refuse to accept election losses this time around, with high-profile candidates like Arizona Senate aspirant Kari Lake declining to confirm they will concede in the event of a defeat.

In a speech just days out from the election, Biden spoke out about “a dangerous rise in political violence and voter intimidation” in the last two years, saying the country was at an inflection point in its history.

“We must, in this moment, dig deep within ourselves and recognise that we can’t take democracy for granted any longer,” the president said - startling words for the leader of a country which has long taken pride in its democratic traditions. 

Closer to home, Kiwi candidates with similar ideological leanings to the American election deniers have had minimal success in both central and local government elections.

However, some of the less pleasant US political trends have already shown a tendency to make their way here, as was demonstrated by the Make America Great Again flags on display at the Parliament protest earlier this year, and New Zealand’s politicians and policymakers will surely be keeping a close eye on how the post-election process plays out in Washington DC.

Asked by Newsroom whether she feared a repeat of the January 6 insurrection after the 2020 election, Ardern chose her words carefully.

“As a general statement, regardless of who is democratically elected, if they are in a robust electoral environment you would always hope for the strength of those democracies that the transition is as seamless and peaceful as it could be.”

“We might look back on these midterms as another small step towards a more inwardly focused America, where voters increasingly ask if global leadership is worth the cost.” – David Capie, Centre for Strategic Studies

Then there is the broader question of American leadership in the world, and how it will be affected by yet more partisan bickering and infighting.

Republicans seem certain to pursue retaliatory investigations into their Democratic counterparts, and potentially even attempt to impeach Biden, at a time when global instability and China’s challenges to the rules-based international order remain a concern.

The two US parties may be of one mind on Beijing, but convincing them to focus on the international environment rather than their domestic disputes is another matter altogether.

Then there is the spectre of a Trump bid for re-election, with the former president reported to be waiting on the strength of the Republican Party's midterms performance before announcing any campaign for 2024.

As Capie puts it, “We might look back on these midterms as another small step towards a more inwardly focused America, where voters increasingly ask if global leadership is worth the cost.”

With forecasts of a global economic recession growing more common by the day, the quality or otherwise of any US response could have implications for how New Zealand is affected.

We will have plenty of our own issues to deal with, of course, and Kiwis are well and truly accustomed to a United States which is no longer able to project the same level of authority as in decades past.

But the butterfly effect means there is still plenty to think about as we head forward into an uncertain future.

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