Frydenberg joins G20 warning on US-China ‘war’

G20 nations led by Australia and Indonesia issue an unprecedented warning over the trade war.

An alliance of G20 nations led by Australia and Indonesia has ­issued an unprecedented warning over the trade war between the US and China, claiming it is putting the entire post-war multilateral system at risk of collapse.

In a joint statement published in The Australian on Friday, the treasurers and finance ministers of Australia, Canada, Indonesia and Singapore have called on the superpowers to end the trade war, warning of the collatera­l damage to other ­nations.

It came as US President Don­ald Trump said on Thursday that he would postpone threats to impose­ a further tariff hike of 5 per cent on Chinese goods, ahead of a resumption in peace talks with Chinese President Xi Jinping next month.

The joint statement by the G20 finance leaders said the world needed to resist a return to unilateralism and protectionism.

“At this moment, rising trade tensions are a serious concern. While we acknowledge that there are legitimate issues that must be addressed, the risks of collateral damage are growing,” the leaders’ statement said. The statement was co-written by Josh Frydenberg, Canadian Financ­e Minister Bill Morneau, Indonesian Finance Minister Mulyani Indrawati and Singapore’s Deputy Prime Minister and Finance Minister, Heng Swee Keat.

With the downside risk to the Australian economic outlook growing amid the dispute, Scott Morrison has pursued the acceleration of free-trade deal negotiations with Britain, Europe and regional countries through the Regional Comprehensive Economic Partnership, which could be concluded by the end of the year.

But the Treasurer has ­acknowledged that already soft economic growth could be further­ undermined if the dispute continues.

The leaders said that the Bretton­ Woods system agreed to after World War II ensured prosperity and a “financial safety net” that had ensured shared success among nations.

“The free flow of trade, investment, and ideas have helped to lift more people out of poverty than ever before,” they write.

“Prosperous and growing middle­ classes are broadening opportuni­ties for the exchange of goods, services and innovation across the world.

“The multilateral system provides the economic and political security to allow both big and small countries to fulfil their tremendous potential.

“As beneficiaries of this system­, we have a responsibility to safeguard the institutions that have led to our shared economic success. We need to work together to forge consensus on pressing global challenges. “Uncertainty over the outlook is contributing to a slowdown in trade and manufacturing activity. We have seen a return of financ­ial market ­volatility, ­currency instab­ility and ­decreased capital flows to ­emerging econo­mies. Dampened global trade conditions are affecting investor confid­ence, business investment and productivity.

“Growth has slowed and risks remain tilted to the downside. The World Bank and the IMF continue to revise down their economic growth forecasts.

“Collectively, we need to take steps to reverse this course. We need to champion the rules-based multilateral system.

“While respecting each ­country’s domestic priorities, we should be clear that protecting free and open markets will ensure stronger growth and greater prosperi­ty for all.

“We must not resort to unilateralism and protectionism. Pursuing confrontation over dialogue will only exacerbate risks, erode confidence and weaken the prospect of global economic recovery.”

The statement comes as Mr Trump agreed to delay a lift in ­tariffs on $US250bn ($364bn) worth of Chinese goods by two weeks as a gesture of “goodwill”.

Mr Trump tweeted that the delay was requeste­d by Beijing ­because the People’s Republic of China would be celebrating its 70th anniversary.

Mr Morrison told parliament his government was focused on expanding trade opportunities.

“We have lifted our trade agreements from less than 30 per cent — around 27 per cent — to 70 per cent over the last six years, expanding­ the borders of our trade to ensure Australians can earn more,” the Prime Minister said.