One of the world's top trade chiefs has warned Australia must help lead world trade negotiations as the US pulls back from the rules-based order and its ongoing trade war with China imperils global economic growth.
The World Trade Organisation's deputy director-general Alan Wolff, who was trade adviser to two US presidents, said if the US and China wanted to have a conflict, the WTO was powerless to stop it and it was up to Australia and other developed nations to fill the void.
"The US is not where it was, it is not the guarantor of the multilateral trading system. It doesn't aspire to be," Ambassador Wolff said in an interview with The Sydney Morning Herald and The Age.
"Which calls for others to take more of a leadership role and Australia is actually in the forefront of countries which are doing so."
The former trade adviser to Gerald Ford and Jimmy Carter said criticism of the WTO was justified. He said it had not lived up to its original 1995 agreement and the body needed to reform its dispute resolution mechanisms to prevent ongoing clashes.
But he added that as a body governed by 164 countries it was "an illusion" that it could prevent all conflicts between its members.
"It's a little bit like saying why hasn't organised religion prevented evil in the world? The answer is that it is beyond its capability. No international agreement has ever stepped conflict completely"
"There were at least three treaties after World War I that outlawed war. That didn't stop there from being a World War II."
He said the US and China "have walked outside of the building and decided to have it out bilaterally" meaning others had "to step forward more than they used to".
The Ambassador praised Australia for steering reforms to digital trade and said he expected the middle-power to play a key role in future negotiations over industrial subsidies and state-owned enterprises. The factors have been at the heart of the US-China trade war that will escalate to $US500 billion worth of goods by the end of the year.
The conflict has slashed global growth forecasts and put markets on a roller coaster for two years. Ratings agency Moody's estimated on Thursday the dispute has already cost more than 300,000 jobs in the US alone.
The fallout has prompted the US Chamber of Commerce to send a delegation to Australia this week to meet with Foreign Minister Marise Payne. The lobby group represents more than 3 million American businesses and is in Canberra to shore up support for US interests amid increasingly protectionist stance of the White House.
The senior vice president of the chamber's Global Innovation Policy Centre, Patrick Kilbride, said President Trump had "shaken the tree" but urged others not to baulk at the benefits of globalisation.
"There are a number of governments that are particularly influential in multilaterals, including Australia and Japan," Mr Kilbride said. "How do you manage the externalities from that? You stay the course."
Trade Minister Simon Birmingham has been ramping up trade agreements with other countries to buttress against any further fallout. On Wednesday he met with UK Secretary of State for International Trade, Liz Truss, who said a post-Brexit trade agreement between the two countries was a top priority.
"The UK will be leaving the European Union on 31 October, deal or no deal," Secretary Truss said. "The reason that I've chosen to make Australia one of the first countries I've visited as Trade Secretary is this is an absolute priority for me to get on with this trade deal."
Freedom of movement for people between Australia and the UK is expected to form key parts of the negotiations after more than four decades of tighter EU immigration restrictions.
"The fact [is] that Australians want to come and live and work in Britain, and Brits want to come and live and work in Australia," Secretary Truss said.
- SMH/The Age