Coronavirus: Allies sign up to reform world trade body

Australia has joined Great Britain, Singapore and New Zealand in a push against protectionism.

Simon Birmingham says there has been ‘understandable dissatisfaction’ with the World Trade Organisation. Picture: Lawrence Pinder

Australia has joined Britain, Singa­pore and New Zealand in a push against protectionism, calling for major reforms to the World Trade Organisation and warning against barriers that would “further erode business confidence”.

In a joint call-to-arms, the Commonwealth allies have launched a staunch defence of open trade markets to help lift ­people out of poverty and support economic growth during and beyond the COVID-19 pandemic.

The four nations say they will work to reform the WTO by “modernising its rules, improving its transparency and making more efficient its settlement of disputes”.

Trade Minister Simon Birmingham said there had been “understandable dissatisfaction” with the WTO, citing the importance of protecting mid-sized players including Australia against the interests of larger nations attempting to “extract concessions and deals to their advantage”.

“Australia clearly needs to push back on anything that would undermine our ability to successfully negotiate and trade with other nations,” he said.

Writing in The Australian on Tuesday, Senator Birmingham, UK International Trade Secretary Liz Truss, Singapore Trade Minister Chan Chun Sing and New Zealand’s David Parker resolve “to lead the world in restoring and deepening global trade”.

“Increased protectionism would only harm the world’s recovery from COVID-19, slowing the necessary return of economic and employment growth,” they say. “Putting in place more trade barriers would be the worst possible response to global economic uncertainty. More barriers would further erode business confidence and would slow the investment needed to restart many economies.

“Developing countries, who have often seen the greatest transformation from opening up, might find themselves shut out of world markets, reducing prosperity and employment.”

They urged nations, in the spirit of 1944 Bretton Woods meeting, to use the pandemic to “again lead us to deepen our commitment to shared rules for the governance of global trade and investment”.

“Together, we will urge countries of the world to stand still on trade barriers and, ideally, agree to roll them back. Together, we will press ahead with our various trade negotiations, seeking to open up new opportunities for our businesses in the post-COVID-19 era.”

The four countries say major social advances, including lifting more than a billion people out of extreme poverty in the past 20 years, were “underpinned by the opening of markets and growth in trade around the world”.

“We are four independent trading nations who have derived success by operating globally. Almost two-thirds of Britain’s economy is made up of trade.

“One in five Australian jobs is trade-related. In New Zealand, that number is one in four. Nearly two-thirds of Singapore’s GDP is generated by external demand.”

Senator Birmingham said the four nations were discussing with other countries the importance of providing confidence to businesses as “when this is over we’re going to continue to promote trade and encourage the maintenance and resumption of trade flows”.

“Australia has recorded a trade surplus for 26 consecutive months, which is a demonstration that the global demand for Australian goods and services is strong, the reliance on Australia from other parts of the world is clear and it’s demonstrably in our benefit to keep trade ties open so that we can maintain that strong level,” he said.

He said post-COVID-19, it would be crucial to re-establish economic strength at a global level, “in a way that drives support for an even more effective and ­efficient” set of trading rules overseen by the WTO.