Malcolm Turnbull calls Bill Shorten a greater threat to world trade than Donald Trump

Malcolm Turnbull says Bill Shorten’s protectionist trade policies would send Australia back to the 1930s.

“Sunshine is the best cure for jet lag,” said Malcolm Turnbull, as he strolled along Lima’s cliff top with Australian ambassador Nick McCaffrey. Pic: AAP

Malcolm Turnbull says Bill Shorten is a greater threat to world trade than Donald Trump, accusing him of embarking on xenophobic protectionism that would send Australia back to the 1930s.

Arriving in Peru for a series of trade liberalisation negotiations at the Asia Pacific Economic Co-operation forum, the Prime Minister admitted that a new populist protectionism sweeping the globe was threatening to undermine Australia’s quest for further free trade agreements across our region.

But he said it wasn’t Mr Trump but Mr Shorten who posed the greater risk to Australian prosperity, condemning the Labor leader for beating a “protectionist drum” that was a sure path to poverty.

“There was a time when leaders of the ALP supported free trade and backed in open markets and stronger economic integration in our region,” Mr Turnbull said after visiting several Australian-run businesses in the capital Lima.

“It was Bob Hawke who founded APEC … and yet it is Bill Shorten now who is running around the country banging a protectionist drum, an anti-free trade drum, trying to actually drive jobs out of Australia by putting up the barriers to the trade that are creating the employment …”

Asked if US President-elect Donald Trump was a threat to APEC and further trade liberalisation, Mr Turnbull said the real change was within the leadership of the ALP.

He accused Mr Shorten of stoking up anxiety and fear and fear of foreigners.

“It is the way to poverty,” he said.

“We have seen this film before … the world did this in the 1930s during the Great Depression and made it much worse.”

He said what Mr Trump did was for him to decide but he said he would be strongly advocating with other world leaders this weekend to not retreat from further reform, as long as it was fair.

Mr Turnbull meets Australians renovating a Lima mansion.

Mr Turnbull acknowledged that the new protectionism was a response by political leaders faced with communities in revolt over falling living standards and a “magnified” fear of being left behind.

In a blunt assessment of rapidly shifting global political and economic landscape in the wake of the US election result, the Prime Minister told an APEC CEO summit in Lima today that governments needed to act to restore faith in open markets.

Mr Turnbull has also conceded that economic “innovation”, a word that formed the centrepiece of his own election campaign, created anxiety for many people who were concerned about keeping their jobs.

Without making any direct reference to the election of Donald Trump on an isolationist and protectionist platform, Mr Turnbull nevertheless warned that going back to a world of tariff barriers was not a “ladder” to climb out of a growth hole but a “shovel” to dig it deeper.

“The first thing is that we must acknowledge that open markets, and the opportunities they bring, can have negative impacts in parts of our communities,” he will tell the summit.

“This feeling of being left behind is only magnified in a world where global growth has continued to disappoint and growth in incomes is modest.”

Mr Turnbull noted that growth rates in the APEC region had dropped below the global average for the first time in 15 years.

“It’s probably no coincidence that we’ve seen an accompanying rise in protectionism across the globe not just in populist rhetoric but also in practice,” he is expected to say.

“WTO members put in place more than 2,100 new restrictions on trade since 2008.

“This is the wrong tool for the job. Protectionism is not a ladder that gets us out of a growth trap but a shovel that digs us deeper.”

The Prime Minister’s address to the CEO summit will reflect a growing realisation by the Turnbull government that the Trump phenomenon signals a broader global disconnect and not one simply isolated to the US.