Scott Morrison has accused the US and China of putting the global economy at risk if they don’t reach agreement to de-escalate their trade war at a critical meeting between the two superpowers at the G20 leaders’ summit in Buenos Aires.
The Prime Minister, expected to arrive in Argentina this morning ahead of the two-day summit, claimed it would be one of the greatest “own goals” if Donald Trump and Xi Jinping could not resolve their differences.
The Australian understands Mr Morrison will meet the US President on the sidelines of the summit, despite a formal bi-lateral meeting not being scheduled.
“This G20 will be a critically important meeting,” he said before he left Australia.
“It is about the two biggest economies addressing their differences to provide certainty and stability to the global economy. We need them to agree on a constructive way forward on global trade.
“We cannot pretend that ongoing trade tensions do not pose real threats to the global economy.”
Speaking before he left for Argentina, Mr Trump said: “I think we’re very close to doing something with China, but I don’t know that I want to do it because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes. So I really don’t know.
“But I will tell you that I think China wants to make a deal. I’m open to making a deal. But, frankly, I like the deal we have right now. “
Mr Morrison and Finance Minister Mathias Cormann, who replaced Josh Frydenberg after the Treasurer pulled out to deal with Coalition unrest following the Victorian election, flew out of Canberra yesterday after question time.
The Prime Minister will hold his first meetings of the summit with President of France Emmanuel Macron over the future submarine contract while pushing for reform of the World Trade Organisation to take a stronger role in arbitrating trade disputes and working against rising protectionism. Mr Morrison will also meet with the EU Commission over the progress of a free trade agreement with the EU and post-Brexit. He will also hold meetings with Brazil
In a statement, Mr Morrison said his priority at G20 would be aimed at finding “a constructive way forward on global trade”.
The International Monetary Fund revised down Australia’s economic growth forecasts last month in light of the continuing trade retaliations.
The IMF report said the stand-off posed a “systemic” risk if allowed to escalate into a full-blown trade war and revised forecasts for Australia’s economy from 3.2 per cent growth this year to 2.8 per cent next year.
Mr Morrison said he had previously urged China and the US to resolve the issue at the Asia-Pacific Economic Co-operation and East Asia summits.
“As Prime Minister, I have set out Australia’s position on the need for these issues to be reconciled, as a friend and partner of both countries,” he said.
“At the recent APEC and EAS summits, there was a clear message being delivered about the own goal that would be kicked by trade tensions continuing.
“My key message at the G20 will be that to enjoy the prosperity, security and connectedness we have today, we must protect the international system. That system is built on rules and openness.
“I believe both the US and China ultimately share this goal, and that should help focus the discussion at the G20 (which) has a good history of dealing with serious economic issues.”
Mr Morrison told The Australian this week he would focus heavily on trade negotiations with Britain and the EU, with talks to be held with British Prime Minister Theresa May — whose job is on the line over her proposed Brexit deal — and French President Emmanuel Macron, who faces internal unrest over a carbon tax plan.
Climate change is expected to be a key area of conflict at the G20.
Expectations for breakthrough deals on the China-US trade war were considered low, with the Chinese President travelling to Buenos Aires after a visit to Spain.
Initial hopes the leaders of the world’s two largest economies could end the trade war have faded, with the best hopes being that their meeting may provide a framework for cooling tensions.
Chinese Foreign Ministry spokesman Geng Shuang said this year’s G20 meeting was being held against the backdrop of a world economy “facing downward risk and pressure impacted by unilateralism and protectionism”.
“China hopes that the mechanism of the G20 summit … will again demonstrate its leading role as a major forum for international co-operation … and inject new impetus for the world economy to embark on a course of robust, sustainable, balanced and inclusive growth,” he said.
This weekend will be the first time the two presidents have met since Mr Trump stepped up his anti-China trade war.
By Simon Benson