Morrison tells US business leaders that it’s time to fix international trade laws that hurt Australian and US businesses

The Prime Minister said international trade rules need to be urgently overhauled to balance the ‘unfair’ advantage they now give to China.

Australian Prime Minister Scott Morrison. Picture: AP

Hardworking Australian businesses are being penalised on the world stage by failing trade rules that give an unfair advantage to Chinese firms, Prime Minister Scott Morrison says.

In a hard-hitting speech to US business leaders, which will ratchet up pressure on China over trade, Mr Morrison invoked Aussie traits of fairness and having a go as he urged new global trading rules.

Speaking to the Chicago Institute for Global Affairs, he said global trade rules were “no longer fit for purpose”, were outdated and not keeping pace with technology.

Australian Prime Minister Scott Morrison says Australian businesses are being disadvantaged. Picture: Adam Taylor

The speech, attended by some of the leading business leaders in the US mid-west, will pile further pressure on world leaders to crack down on China’s alleged exploitation of generous rules.

It also laid down Mr Morrison’s markers about his increasing frustration with the archaic rules ahead of two major summits in November – the APEC economic leaders’ meeting in Chile and the ASEAN conference in Thailand.

The trade war that has erupted between Beijing and Washington has caused significant concerns worldwide, particularly in Australia, with Mr Morrison imploring both sides to end the crisis quickly.

US President Donald Trump says China is a ‘threat to the world’. Picture: Adam Taylor

During an Oval Office meeting with Mr Morrison on a state visit, US President Donald Trump described China as a “threat to the world”.

Also in their private chat, the leaders spoke about problems plaguing the trade system and the need to overhaul World Trade Organisation rules.

In his speech, Mr Morrison said he agreed with President Trump’s views that while the “global economic system continues to serve our interests, it is in need of reform”.

“Without a spirit of enterprise, of endeavour, of aspiration, no nation will deliver security, economic prosperity and national unity to its people” he said. “We also need to work together to find ways to reduce trade tensions that have developed over recent years.”

Under current rules, China enjoys so-called “newly developed economy” status, which means they get special favours for being a new economy – something Mr Morrison said was clearly wrong, especially for hardworking families.

A worker in a Chinese textile factory ... Australia and the US say China has unfair trade advantages. Picture: AFP

The status means it has extensions on when it can impose trade rules, enjoys softer tariff cuts, procedural advantages for WTO disputes and the ability to use export subsidies.

It is also allowed to increase greenhouse gas emissions when other countries are told to cut pollution.

“China’s economic growth is welcomed by Australia and we recognise the economic maturity that it has now realised as a newly developed economy,” the Prime Minister said.

Mr Morrison and Mr Trump want China to fall into line. Picture AAP

“This was the point of the world’s economic engagement with China.

“Having achieved this status, it is important that China’s trade arrangements reflect this new status and the responsibilities that go with it as a world power.”

Mr Morrison said Australia’s interest in the Indo-Pacific was shaped by open markets, free trade rules, respect for sovereignty of nations, irrespective of size, as well as for international law and the peaceful resolution of disputes.

He also said his government was committed to resolving challenges of common interest including on oceans, climate, illegal fishing and plastics pollution.

Mr Morrison now travels to New York for UN Leaders’ week, during which he will speak to the General Assembly.

Originally published as Morrison tells US business leaders that it’s time to fix international trade laws that hurt Australian and US businesses