OPINION: At 11.59pm on Thursday March 19, the New Zealand Government shut the border for the first time.

That's right: Literally seal New Zealand off and stop even the possibility of more foreigners bringing the coronavirus into New Zealand. Of course, Labour in this part of the world is a big free trading party, and as recently as two weeks ago Government sources were telling Stuff that there was no way the trans-Tasman border would ever be closed: the economic hit and importance of free flow of people and goods would make the costs of closure much too high.

Yet last Saturday, this was effectively what the Government (and the next day the Australian Government) did.

Perhaps more remarkably, the announcement came a couple of hours after the National Party called for the border to be closed for all non-citizens and non-residents. This is the same National Party that ran a high-migration economic policy during its last nine years in charge, and is a pro-market, free trade, open borders sort of party.

The self isolation measures alone mean that once everyone who can get back home, does, the air traffic will likely dry up to a dribble anyway. Air New Zealand has cancelled most of its international flights, while Qantas and Jetstar in Australia have temporarily suspended all of them. Australian Prime Minister Scott Morrison shut the Australian border at the same time.

In the United States, Treasury Secretary Steve Mnuchin warned that US unemployment could hit 20 per cent. While the Government here has said it could be 8 per cent - about double what it is now - that is only going on the very preliminary forecasts it has received from Treasury. The real economic figures could be much worse.

Consider the following: New Zealand's biggest export earner, tourism, is effectively dead for the time being. According to Tourism New Zealand in the year ended March 2019, the sector directly employed 8.4 per cent of the entire workforce, over 20 per cent of New Zealand's foreign exchange earnings. It generated over 5.6 per cent of GDP, and associated industries generated a further 4 per cent of GDP.

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That's more than 10 per cent of the economy, and that's only tourism. Most estimates of unemployment during the Great Depression are 15 per cent (and that only counted Pākehā males). In modern New Zealand unemployment hit a record 11.2 per cent in late 1991. That record could be under threat.

Step back and look further: New Zealand is plugged into global supply chains that have come to rule global commerce but rely on a free flow of goods that is now seriously hampered. The part of that supply chain that was freighted by air now, while continuing, will likely be disrupted in the near term.

This will be grist to the mill of every protectionist and anti-globalist about. But if Covid-19 is going to stick about for a year or two, we may have to get used to a higher level of economic disruption - including to those very supply chains. It's not cause for panic buying, but to pause and reflect.

Global supply chains rely on two things: relatively open trade and comparative advantage. In a globalised world that means each country sticks to making things they can produce more cheaply or at a higher quality than others. It means that countries don't need to produce a whole pile of things because they can be imported. For New Zealand, think cars, computers, frozen raspberries or hand sanitiser.

But the new world that emerges after the coronavirus recession, as with the new world after the depression in the 1930s, could well be different. Most likely more insular and have each nation looking at how they can produce a wider range of goods themselves, for their own consumption. That will mean some level of protectionism, which every bit of economic theory suggests will mean Kiwis end up paying more money for a smaller range of inferior goods. That's the downside. The upside is that the supply chain is local and so cannot be disrupted in the same way by a big global event such as this.

This may sound like scaremongering, but Stuff understands that in this early planning stage the most optimistic, best case scenario sees visitors starting to come back to New Zealand next summer. That assumes that Western democracies are as efficient at stamping out the virus as the authoritarian communists in Hubei province. That seems like a stretch.

World War Two yanked New Zealand into an era of sacrifice and Dame Vera Lynn ditties. But it was the depression that preceded it which birthed the modern Labour party, the welfare state and really ended the imperial era of rollicking globalisation. That set the template for New Zealand's development until Rogernomics yanked us back into global markets.

With both parties committed to free trade it is difficult to see a widespread protectionist response to this crisis. But it is difficult to see how unemployment won't hit the late 1991 high of 11.2 per cent.

Coronavirus has entirely come from an external shock abroad, and confirms the wisdom of both the current Government, and the previous one running budget surpluses. As a small exposed trading nation, being able to deploy a fiscal cannon is crucial. The Government economic package on Tuesday was a good start.

Yet, when all of this is over and the borders are open again, we will wake up and find ourselves in a new world. Quite how different, no one yet knows.