Name: New Zealand Prime Minister Luxon on Global Trade
Uploaded: 2025-11-03T02:55:53.341Z
Duration: 4 min 22 s
Description: New Zealand Prime Minister Christopher Luxon speaks on on global trade, interest rates, fiscal position.

New Zealand Prime Minister Christopher Luxon speaks on on global trade, interest rates, fiscal position.

Auckland

New Zealand Prime Minister Christopher Luxon highlighted three major shifts in global trade: a move from rules-based systems to power-based dynamics, a stronger link between economics and security, and a focus on national resilience over global supply chains. Luxon emphasized New Zealand's Indo-Pacific strategy, aiming to strengthen ties with Asian markets and diversify trade partnerships.

On the domestic front, Luxon addressed New Zealand's economic recovery following its largest recession in 35 years. He outlined the government's fiscal consolidation efforts, expectations for job growth, and the importance of coordinated fiscal and monetary policy to lower inflation and interest rates. The Reserve Bank's recent and potential future rate cuts were also noted as part of the recovery strategy.

New Zealand Prime Minister Luxon on Global Trade

I think there's three big shifts that are happening. We're seeing a shift from sort of rules to power, we're seeing a very much a strong connection between economics and security, and the third thing we're seeing is a lot more national resilience rather than globally connected supply chains. And that's a function of COVID, it's a function of our economics, a function of a changed trading environment. So there's no doubt about it, the rules-based system that has served us well for 70 to 80 years is challenged. But within that context, we should be incredibly optimistic that we can plot a course and that we can innovate and can incubate new ideas as we have done in the past out of APEC. And so whether it's been the FITP, whether it's been the thing that both Mark and I have advocated very strongly for and talked to the Europeans about is to have an EU CPTPP dialogue, a trade dialogue, so that we can reaffirm the rules-based system. Those are important things. But equally, we should be reforming the WTO, we should be doing a bunch of things to make sure that we are relevant and on point and able to deal with the world as it is today. And Mark Carney's strategy is to pivot to Asia from the US because the US is a much less reliable trading partner for Canada than it has been in the past. New Zealand's obviously very, very dependent already on trade with Asia. Do you have a similar strategy of sort of trying to improve and increase New Zealand's? Our strategy is pretty simple. As a small trading nation, we want to do business with as many people as possible and as many places as possible. And so our real focus as a new government has been an Indo-Pacific reset and focus. We see that's where our security sits, that's where our prosperity will sit. That's why we've had over 42 visits, I think, into Southeast Asia alone as a government. But we spend a lot of time in China, in Southeast Asia, in Northeast Asia, expanding our FTA, negotiations with India, obviously closing out negotiations with GCC and the UAE, building back a strong relationship with Australia and playing a role in the Pacific. So for us, our Indo-Pacific region is both where prosperity and security sits. And both those two things in 2025 are inextricably linked. You can't have one without the other. They are mutually dependent on each other. And on the domestic economy, the economy contracted in the second quarter after a number of consecutive contractions. Reserve Bank cut rates in October. But Nicola Willis was telling us last month that she's confident the economy is growing this quarter. Are you as confident at the end of the start of November that the economy will return to growth in the fourth quarter? Are rates where they need to be accommodative enough for New Zealand? And what can you do on the fiscal side to help the economy sort of return to growth? Yeah, look, we're coming out of a recession that's been our biggest recession, I think, in 35 years. New Zealand also had probably one of the longest COVID hangovers. We were the second biggest proportionately spending economy. The previous administration was a big spending government, taxing more, borrowing more, spending more. Our job is to put the fiscal repair and consolidation in place. And that's what we've been doing. And so I think as fiscal partners, getting control of spending so that we can get inflation down, get interest rates down, get the economy growing, and lower unemployment is a good thing. And we're well on that pathway. We had good growth in Q4, good growth in Q1. Obviously, the second day of April with Liberation Day, that meant a huge loss of confidence to investors and also to consumers. But we're growing again in the third quarter and expected to accelerate in the fourth quarter. The outlook for New Zealand is very positive. I mean, we are expected to grow 240,000 new jobs in the next four years, average probably 2.7% growth, I think 2.4% over the next two years as well. So you know, the outlook is there. But the question now is we don't just want to watch a recovery take place, we want to shape that recovery. And that means for us, we've got a fantastic future, we've got a great country, and we need to make sure it realises all of its potential. And that's what my government's very focused on. So the Reserve Bank said at the meeting, or the governor said that the economy is still weak, and they were looking to cut further. You probably won't comment, if you're happy to comment on where the policy rate should be, I'd love to hear that. But I mean, do you agree with that? Well, I respect the independence of our Reserve Bank of New Zealand. But you know, they've already forecasted that, you know, they've got one more opportunity potentially to cut rates further before Christmas. And again, what you need is fiscal and monetary policy working in concert together. And so we're doing everything we can as a government to make sure that we're getting rid of the wasteful spending, that we're actually doing our role so that coupled with monetary policy, we can actually lower inflation, lower interest rates.

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