Australia

'I'm not naive': Morrison says US-China trade deal unlikely

0:00

Prime Minister Scott Morrison is doubling down on pursing a regional trade deal as hopes fade that the US and China can reach a resolution to their dispute.

Trade tensions between China and the United States are unlikely to be resolved during the two-day G20 summit but Scott Morrison is hoping deals with other countries will ease the impact on Australia.

The prime minister has spoken with both US President Donald Trump and Chinese leader Xi Jinping while in Osaka for the meeting with major country leaders.

But he says it would be unrealistic to expect a resolution to the months-long tension and tit-for-tat tariffs when the leaders of the two economic giants meet on Saturday.

"There's obviously a determination to resolve it but I'm not naive about the difficulties of that occurring," Mr Morrison told reporters on Friday.

Donald Trump shakes hands with Xi Jinping.
Donald Trump shakes hands with Xi Jinping.
AAP

"The fact that they're engaging is positive but I'm simply aware that there are very real, substantial and difficult issues to be resolved."

Mr Morrison told both presidents their spat was negatively impacting the global economy, hurting other countries.

"The comment isn't made as a criticism, it's just made as a candid observation. And I'm not the only one making it who's here," he said.

The IMF has put a concrete measure on that impact, saying global growth in normal circumstances would be 3.6 per cent in 2020 but would drop to 3.1 per cent if planned additional tariffs are implemented.

Scott Morrison at the G20.
Scott Morrison at the G20.
AAP

Japanese Prime Minister Shinzo Abe opened the formal meetings by telling leaders the world was watching and the summit must send a strong message to maintain and strengthen a free, fair and open trading environment.

"I harbour grave concern regarding the current situation on global trade," Mr Abe told the G20's first session.

"Free and open economy is the foundation of peace and prosperity, while anxiety and discontent about the abrupt changes due to globalisation at times generate a temptation to protectionism, bringing in sharp confrontation between states."

Mr Trump was asked at the start of his dinner with Mr Morrison on Thursday whether he recognised his "America first" policies, especially on trade, hurt allies like Australia.

"I think I can say very easily that we've been very good to our allies," he told reporters.

However, he wasn't receptive to Mr Morrison's argument the US-China dispute was damaging other countries' interests.

The US holds concerns over theft of intellectual property, forced transfer of technology and industrial subsidies, which Mr Morrison has said are legitimate worries.

Mr Trump indirectly targeted Chinese technology giant Huawei in remarks to a G20 session on the digital economy, warning that "at the same time as we expand digital trade, we must also ensure the resilience and security of our 5G networks".

"This is essential to our shared safety and prosperity," Mr Trump said.

He and Mr Morrison also discussed the bans several Five Eyes countries have placed on Huawei supplying technology for 5G networks.

Another sign of the tense Sino-US relationship came at the official "family photo" of all G20 attendees, when Mr Xi switched places with Turkey's leader rather than stand in his assigned spot next to Mr Trump.

Mr Morrison, meanwhile, is talking up the prospect of sealing the Regional Comprehensive Economic Partnership deal with the 10 ASEAN countries and six others in the Indo-Pacific, not including the US.

"If anything, what all of this demonstrates is why Australia has to be out and about as much as possible, engaging with as many countries as we can, to secure as many opportunities as we can," he said.

He discussed the deal with Mr Abe on Thursday, following talks with Singaporean leader Lee Hsien Loong earlier this month.

It is hoped the deal can be finalised by year's end.

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch