This paper positions local literacy issues against a backdrop of increasing global ethnolinguistic diversity. National language choices are generally influenced by wider debates on the "politics of location," so decisions about language(s) associated with teaching literacy in schools tend to occur at the intersection of national and international interests. The tensions that exist at this intersection may underlie the fact that, while schools in New Zealand have been keen to embrace the multimodal literacy opportunities offered by new technologies and greater global connectivity, increased ethnolinguistic diversity has been slower to impact on literacy pedagogy. As a result, New Zealand's educational policies have tended to reinforce literacy practices that are largely English dominant, and New Zealand teachers are often found to be negotiating literacy-related pedagogy within intercultural classrooms by "trial and error." This paper provides insights into this situation and presents three literacy scenarios involving young English language learners to illuminate some of the critical literacy challenges that face New Zealand education. Ultimately, it is argued that more emphasis on transliteracy experiences will be required to meet the educational aim of greater participation in future global contexts. (Contains 2 tables.)