By Eryk Bagshaw
Treasurer Josh Frydenberg says political volatility and trade tensions have led to the most significant shift in the global environment since the Cold War as he urges the G20 to resolve its disputes amicably before they spill over into the Australian economy.
Mr Frydenberg, who will fly into the G20 meeting in Osaka on Friday, said global rivalries were on the rise as "the global power balance shifted with the centre of economic gravity to Asia".
Federal Treasurer Josh Frydenberg will fly into the G20 meeting in Osaka on Friday.Credit: Simon Schluter
The Treasurer will reaffirm Prime Minister Scott Morrison's veiled criticism of President Donald Trump's style of trade negotiations when he meets with US Treasury Secretary Steve Mnuchin - urging the G20 leader to resolve his disputes with China "amicably" while respecting the importance of multinational institutions.
"This meeting comes at the time of the most significant shift in the global environment since the Cold War," Mr Frydenberg said. "We are seeing strategic rivalries on the rise, shifts in the global power balance and political volatility."
Mr Morrison used a speech to the Australia-UK Chamber of Commerce in London on Tuesday to criticise Mr Trump's approach to the trade war, amid fears it could wipe billions from Australia's economy.
"We must guard against a lurch towards a narrow, transactional approach to our international relations where our relationships and the ambitions for the world that we share together become nothing more than the sum of our deals," Mr Morrison said.
The Reserve Bank of Australia cut interest rates to an all time low of 1.25 per cent on Tuesday and warned the US-China trade dispute over manufacturing and intellectual property was the largest downside risk to the international economy.
"One-in-five Australian jobs are linked to trade. It is vitally important that we are using our seat at the top table to promote our national interests," Mr Frydenberg said in an interview.
He said the challenges to multinational institutions - including the World Trade Organisation - meant bilateral relationships have become more important than ever.
"Our strong relationship with the US is enduring," he said.
The Trump administration reportedly considered putting trade tariffs on Australian aluminium last week.
Mr Frydenberg will also meet with US Federal Reserve Chairman Jerome Powell, Britain's Chancellor of the Exchequer, Phillip Hammond, and the finance ministers of Japan, Germany and Indonesia.
He said tax and infrastructure would form a key part of discussions and acknowledged technology had become an issue after the Australian government banned Chinese giant Huawei from the local 5G network over national security concerns.
"Obviously technology is a sensitive issue, it is the great disrupter," he said.
Senior Australian intelligence officials have urged Britain to ban Huawei from a role in building new ultra-fast mobile networks, arguing the western alliance of intelligence-sharing partners should have a consistent position.
Mr Frydenberg said he would also pursue a global consensus over profit shifting and a digital tax after the Morrison government abandoned plans to pursue a 3 per cent advertising tax on social media giants before the election. The government had made it a top priority in the 2018-19 budget.
"What we are trying to work through with our global counterparts how we can better share information," he said. "It needs an international solution."