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  • rmacculloch

On Richard Prebble and Don Brash's Bizarre Claims about the link between Trade and Military Alliances

Last week, former ACT Party leader & Labour Minister, Richard Prebble, who reads this blog, wrote an opinion piece for Main Steam Media behemoth, the NZ Herald, with the blazing headline, "It is lunacy to join a military alliance aimed at our biggest trading partner". Don Brash, former National Party Leader & RBNZ Governor, together with Helen Clark, our former PM, have been writing articles with the same theme. Brash has defended spying by China, saying "That's What Great Powers Do", and also argues that by joining the military alliance, AUKUS, "we antagonize the country which is, by a substantial margin, our largest trading partner". There is a long and ambiguous economics literature on the relationship between trade and conflict between nations - which mainly tries to address the question as to whether deeper trade ties lessen the chances of war.

My opinion is that Prebble and Brash are talking nonsense. Why? You could not be more part of a military alliance than Japan - which is aimed partly at China - with Japan even hosting a bunch of full blown US bases. The history of those two countries could not be more fraught, with the Japanese having, of course, invaded China in 1937. So who is Japan's largest trading partner nowadays? China. Japan's total imports and exports from China equaled $US 348 billion in 2021, with America far behind at $US 216 billion. Let's repeat the story. You could not be more part of a military alliance than South Korea which is aimed at North Korea/China, with South Korea also hosting a bunch of US bases. So who is South Korea's largest trading partner today? China. Its total imports & exports from China equal around $US 268 billion, with America far behind at $US 131 billion. Let's repeat the story again for the benefit of Prebble & Brash. The US military has a significant presence in the Philippines and that country is currently experiencing a fraught relation with China in its surrounding seas. Who is the Philippines largest trading partner? China.

Just because a country is your biggest trade partner, doesn't mean you have to be big buddies with it. Since when did the right-wing, which Prebble & Brash represent, believe you must be mates with those you do business with?



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