Australian PM Scott Morrison warns global trade rules must be reshaped to account for China’s rapid growth
- Referring to China as a ‘newly developed economy’ is at odds with Beijing’s self-declared status as a developing economy but in line with the campaign led by the US
- Morrison’s comments also indicate Australia has shifted its policy on global responsibility for combating the climate emergency, urging China to do more to reduce emissions
Global trade rules are “no longer fit for purpose” and must be changed to accommodate China’s new status as a developed economy, Australian Prime Minister Scott Morrison said in a major foreign policy speech in the United States.
The global community had engaged with China to help it grow but now must demand the world’s second-largest economy bring more transparency to its trade relationships and take a greater share of the responsibility for addressing climate change, Morrison said.
“The world’s global institutions must adjust their settings for China, in recognition of this new status,” said Morrison in a speech to the Chicago Council on Global Affairs, referring to China as a “newly developed economy”.
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“That means more will be expected of course, as has always been the case for nations like the United States who’ve always had this standing,” Morrison said.
Global trade rules were “no longer fit for purpose” and in some cases were “designed for a completely different economy in another era, one that simply doesn’t exist any more”, he added.
Referring to China as a newly developed economy is at odds with Beijing’s self-declared status as a developing economy, which affords it concessions such as longer times to implement agreed commitments, according to the World Trade Organisation (WTO).
It also keeps Australia in line with a campaign led by US President Donald Trump to remove China’s developing nation status. In an April 7, 2018 tweet, Trump wrote that China was a “great economic power” but received “tremendous perks and advantages, especially over the US”.
Morrison has previously urged China to reform its economy and end a trade war with the US but has until now stopped short of taking a public position on its WTO status.
While two-way trade between Australia and China has grown since the countries signed a trade pact in 2015, increasing to a record A$183 billion (US$127 billion) last year, the bilateral relationship has at times been strained.
Morrison said Australia and the US had different relationships with China, given Australia had a trade surplus with China while the US had a trade deficit.
“The engagement with China has been enormously beneficial to our country,” he said. “We want to see that continue.”
In some cases, the rules were designed for another era, one that no longer exists
Morrison’s comments also indicate Australia has shifted its policy on global responsibility for combating the climate emergency.
With the UN climate action summit under way in New York, Morrison is arguing China needs to contribute more to the global effort to reduce greenhouse gas emissions – to make a developed economy contribution rather than be given more leniency as a developing economy – a stance Beijing rejects.
Morrison is not attending the New York summit. Instead, Australia will deploy its foreign affairs minister, Marise Payne, and the Australian ambassador for the environment, Patrick Suckling. Only countries with new concrete commitments to announce were allocated speaking spots at the event.
Ahead of the New York summit, China flatly rejected Morrison’s argument that it needed to do more to reduce emissions, pointing to the long-standing principle in global climate negotiations of “common but differentiated responsibilities”.
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In a statement from the ministry of ecology and environment, China said climate action needed to be proportionate with “respective capabilities, in the light of different national circumstances”.
China also signalled it wanted support from developed countries to help it manage the transition.
“In particular, the developed countries should implement and strengthen their commitments to providing financial and technological assistance to developing countries, opening markets and carrying out practical technological cooperation – thus creating the basis for mutual trust and important conditions for comprehensive and effective implementation of the Paris agreement,” the statement said.
“As the largest developing country, China is also entitled to funds support. China urges the developed countries to honour the commitment of US$100 billion allocation each year from 2020 on to support the developing world in addressing climate change.”
Australia wants an end to the damaging trade dispute between Washington and Beijing that is imperilling global growth. But Morrison also sees benefit for Australia if Donald Trump’s profound disruption of the relationship ultimately forces China to reset its rules of engagement for trade agreements, market access and inbound foreign investment.
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Morrison told his American audience the world was grappling with the end of one era and the dawn of another, confronting “a changing economic order and transformative technological change”.
He said Australia was on the frontline of the change in the Indo-Pacific, “the region that will continue to shape our prosperity, security and destiny and, increasingly, the global balance of power”.
Additional reporting by The Guardian
