Steven Ciobo warns of anarchy without WTO

Trade Minister Steven Ciobo has warned of the dangers of a world without the World Trade Organisation’s rules.

Trade Minister Steven Ciobo has gone into bat for the World Trade Organisation. Picture: AFP

There would be anarchy without the World Trade Organisation’s rules, Trade Minister Steven Ciobo has warned in a rousing speech championing free trade.

Mr Ciobo, who came under heavy fire recently for initially ­declining to rule out backing WTO action against US President Donald Trump’s steel and aluminium tariffs, told the Foreign Correspondents Club in Hong Kong yesterday that it was ­important not to be distracted by American talk of trade wars.

He said the weekend’s special ASEAN summit in Sydney and the recent signing of the Trans-Pacific Partnership-11 agreement, underlined that “trade-liberalising economic integration between nations is driving growth in the Asia-Pacific region”.

“Protectionism not only doesn’t work, but in fact is shooting yourself in the foot. It is wealth-destroying, and does not deliver either the prosperity or certainty its proponents claim,’’ he said.

Australian prices for televisions and computing equipment had fallen 91 per cent over the past two decades as a result of freer trade, Mr Ciobo said, while cars were 21 per cent cheaper in real terms than they were in 1997.

The Australian experience from opening up to the world had been one of shared prosperity, with real median wages up about 50 per cent over the past 20 years, compared with only 4.4 per cent in the US.

“Trade and investment’s ­capacity to create wealth has been shown time and again, and nowhere is this clearer than here in Hong Kong,” with which Australia is negotiating an “ambitious, high-quality” free-trade agreement, Mr Ciobo said.

The WTO, which Mr Trump has labelled a “catastrophe”, still had a vitally important role to play, including as a dispute-resolution body.

“We want to improve the WTO, not end it, and we encourage all the major powers to act consistently within the existing rules,’’ he said.

Australia, as a trade-exposed economy, had a proportionately greater stake in a functional international trading system that reduces uncertainty and allows business to make long-term ­investment decisions, Mr Ciobo said, adding that “the alternative to rules is anarchy”.

He described China as “a great example of what happens when reform and trade liberalisation are allowed to take place”, and ­welcomed Chinese Premier Li Keqiang’s recent announcement that China would open aspects of education, health and financial services.