Mathias Cormann to strengthen OECD links with China

Mathias Cormann is to tilt a reinvigorated OECD towards the Asia-Pacific and formulate a way to engage with China while pushing for net-zero carbon emissions.

Mathias Cormann says ‘we need to restore trust in the value of global economic relations and in multilateral approaches to tackle shared challenges’. Picture: AFP

Former finance minister Mathias Cormann is to tilt a reinvigorated OECD towards the Asia-Pacific and formulate a way to engage with China — specifically to push back against forces of economic nationalism — as well as demand countries achieve net-zero carbon emissions by 2050 with “effective and efficient’’ results, not just commitments.

In a hard-hitting five-point blueprint released in his maiden speech on the first day as Secretary-General of the Organisation for Economic Co-operation and Development, Mr Cormann said the organisation’s global relations strategy “must include a renewed focus on our engagement with the Asia-Pacific region, including the ASEAN countries and China”.

He said such engagement was a “critical part of seeking effective solutions to global challenges”.

Mr Cormann has argued that the OECD commitments to democracy, human rights, the rule of law, market-based economic principles, a global level playing field and a rules-based international order were the best way to maximise sustainable growth, prosperity and general wellbeing. In a subtle reference to the ongoing trade tensions between China and other countries, particularly Australia, Mr Cormann also stressed that the rules-based international trading system remained under pressure.

“We need to ensure that markets remain open to the greatest extent possible,” he said.

“There is an opportunity for OECD countries to speak with one voice, for example within the WTO, and to push back against the forces of mercantilism, economic nationalism and protectionism. We need to restore trust in the value of global economic relations and in multilateral approaches to tackle shared challenges.”

Mr Cormann said “market- based economic principles work” and global competition at its best was a powerful engine for progress, innovation and an improvement in living standards.

He added: “But as uncomfortable as it can be, competition is – and should be – unavoidable.”

Mr Cormann began the high- powered Paris-based OECD job on Tuesday, coinciding with the 50th anniversary of Australia joining the organisation. During the election process for the position, Mr Cormann was heavily criticised for being part of the Liberal government that was lagging on international carbon emissions policies.

But he noted more countries were committing to net-zero emissions as soon as possible and by no later than 2050.

“The challenge is how to turn those commitments into outcomes and to achieve our objective in a cost-effective, economically responsible and publicly supported way that will not leave people behind,’’ he said to the 38 member countries.

“I will use every policy and analytical capability right across the OECD to ensure we play a leadership role in helping to achieve that objective.’’ Mr Cormann said the OECD would collaborate with the International Energy Agency, the Nuclear Energy Agency, the International Transport Forum and others.

“We can help map out what needs to be done, benchmark climate outcomes — not just commitments — as well as indicators and policies,” he said.

Mr Cormann has also put the opening of international borders on the OECD agenda.

“We need to map the transition from crisis settings to the recovery and beyond,’’ he said.