When the Rooms Move
How Greenland and Gaza reveal a changing reality for small states like Aotearoa
Aotearoa is accustomed to being in the room. Not because it is powerful, but because it is credible. Fluent in process, predictable in behaviour. For much of the post-war period, credibility and influence broadly overlapped and small, “rule-abiding” states were rewarded for consistency.
That overlap is thinning.
In recent days, two apparently unrelated foreign policy moments have passed through Wellington. One concerns trade and Greenland. The other concerns war and Gaza. On the surface, they could not be more different. If we look closer from strictly a foreign policy lens, and they reveal the same underlying problem. Not just for Aotearoa, but small states generally.
The problem is not which position to take. It is that the room where positions once mattered are quietly disappearing.
When Prime Minister Christopher Luxon, said that tariffs were “not the way forward” in disputes involving Greenland, he was expressing a deeply familiar instinct. Trade disagreements, in our tradition, belong in multilateral forums, such as the World Trade Organisation, where disputes are meant to be resolved through agreed rules rather than unilateral pressure. Rules matter here. Retaliation corrodes systems that small, open economies heavily depend on.
Luxon’s statement was coherent and aligned with what we have heard with last year’s roll out of U.S. tariffs.
It is now entirely clear that tariffs are no longer primarily trade instruments. They have returned as tools of geopolitical leverage, deployed unilaterally and often in defiance of the very systems designed to constrain them. Saying tariffs “are not the way forward” does not prevent their use. It signals restraint in an environment where responsible restraint is no longer reciprocated.
A day earlier, it was reported that Luxon was invited to join a proposed “Gaza board of peace” floated by U.S. President Donald Trump. This initiative sits outside formal diplomatic architecture. It is informal, personality-driven and designed to promote legitimacy rather than produce outcomes. Its primary function is not resolution, but flexing: who is consulted, who lends credibility, who confers moral weight simply by showing up.
Again, Aotearoa’s instincts are clear. Such processes sit uneasily with our commitment to international law and multilateral legitimacy. Participation risks endorsement. Absence risks irrelevance.
Trade and war. Greenland and Gaza. Different domains, different stakes. For Aotearoa, the same structural exposure. In both cases, the forum has shifted.
For decades, our foreign policy advantage rested on a stable alignment: power operated largely through institutions, and legitimacy conferred influence within them. Being principled was not only virtuous — it was practical. It bought access. It reduced exposure. it made restraint rational.
That alignment is eroding. Trade disputes increasingly bypass the World Trade Organisation. Security decisions are shaped through informal groupings, bilateral pressure and personalised authority. Diplomatic initiatives arise that borrow legitimacy rather than earn it through process. Power does not abandon institutions entirely. But it no longer waits for them either.
For small states, this produces a quiet but consequential inversion. Foreign policy becomes less about shaping outcomes and more about managing exposure. Aotearoa does not cause these changes. It does not benefit from them. But it must operate inside them.
The costs are real, if often invisible. Trade coercion imposes volatility on exporters who had no role in the dispute. Informal diplomacy creates reputational risk without corresponding influence. The systemic consequences of great-power experimentation are absorbed disproportionately by small, rules-dependent economies.
In that environment, reaffirming principles remains necessary. But it is no longer sufficient.
This is where the distinction between restraint and irrelevance becomes uncomfortable.
Historically, Aotearoa restraint functioned as credibility. Today, it increasingly risks becoming background noise — morally coherent, strategically marginal. Rejecting tariffs does not prevent their use. Declining informal invitations does not prevent parallel power structures from forming. The choice is no longer participation versus abstention. It is how visible you are when you cannot materially influence the outcome.
The most tempting response is quiet deferral. Neither endorsement nor rejection. Flexibility preserved; cost postponed.
But over time, deferral without doctrine becomes drift.
Without an articulated framework for engaging with informal power — when to participate, when to refuse, what legitimacy is worth lending and what price — decisions are made ad hoc. Principles remain intact, but agency thins. Strategy becomes reactive. Exposure accumulates.
This is not a critique of Luxon personally. His responses are consistent with our long-standing posture. The issue is that the posture itself was built for a world in which the rules still set the agenda. That world can no longer be assumed.
What this moment requires is not the abandonment of principle, but a shift in orientation.
As power fragments, legitimacy becomes a resource rather than a default — something that can be lent, withheld or diluted depending on the forum in which it is exercised. For small states, this demands a move from instinctive institutionalism to forum literacy: an ability to distinguish between arenas that shape outcomes and those that merely signal them, and to understand the reputational cost of appearing in each.
Participation is no longer neutral. Absence is no longer costless. Both must be chosen deliberately.
That, in turn, requires something Aotearoa has rarely needed to articulate before: a theory of engagement for a world where the rules still matter, but no longer control the timetable.
Greenland and Gaza are not connected geopolitically. But for Aotearoa, they reveal the same reality, the slow disappearance of the rooms where small states once mattered by default.
The risk is not that Aotearoa abandons its principles too quickly. It is that it mistakes principle for protection — and consistency for insulation.
For much of the post-war period, legitimacy travelled with power. Today, power increasingly travels light. It convenes where it wishes, invites whom it chooses and borrows credibility as needed.
If power no longer asks for permission, small states must decide what they are willing to lend — their presence, their reputation, their silence — and on what terms.
That decision cannot be deferred indefinitely.