Australia politics live: ‘change in tone and mood’ as Marles meets Chinese defence minister

The head of the World Trade Organization has used a speech in Australia to warn that geopolitical fear and mistrust could lead to “aggression and ultimately a world war, this time with nuclear weapons”.

Dr Ngozi Okonjo-Iweala, addressing the Lowy Institute in Sydney last night, said trade had emerged as an arena for geopolitical rivalry:

Over the past decade, governments have in several instances unfortunately weaponised trade and economic interdependence as a way of handling big and small power rivalries and disagreements. In Australia today, you’re living this reality in your region.

Weaponisation of trade is problematic, not least, because it creates some challenges for the rule-based multilateral trading system, but also because it could slide down the slippery slope beyond a few targeted products or sectors to wider economic disruptions. And of course, when viewed as economic coercion, it could become a tit-for-tat exercise, with the possibility of slipping out of control, leading to broader, more painful repercussions: economic, political, and social.

Ladies and gentleman, we would be naive to rule out the possibility that our era could meet the same end an earlier episode of power shifts and global integration did in 1914, with fear and mistrust, giving way to strategic miscalculation, misjudgment, aggression, and ultimately a world war, this time with nuclear weapons. Historians have likened our predecessors from a century ago to sleepwalkers who blundered into a catastrophe no one truly wanted. We must make better choices.

Okonjo-Iweala was not specific about which countries had weaponised trade, but in saying that Australia was “living this reality” she appeared to be referring – at least in part – to the trade tensions between China and Australia. Beijing since 2020 rolled out actions against a range of Australian export sectors in moves that the Morrison and Albanese governments branded as “economic coercion” and “trade sanctions”. The WTO director general may also have been referring to the tit-for-tat trade war between the US and China during the Trump administration.

Okonjo-Iweala argued the fracturing of economic ties was “more likely to heighten geopolitical tensions than to soothe them”, and that at a time of serious global challenges including rising inflation, climate change and the war in Ukraine “we need multilateral cooperation and solidarity more than ever”.

She urged governments to “use trade constructively to solve problems rather than amplify them” and to “make trade a force for peace in the 21st century”. She proposed an “alternative vision for the future of trade, interdependence, without over-dependence, deeper, more diversified and de-concentrated international markets”. She summarised this idea as “re-globalisation, not de-globalisation”.

Okonjo-Iweala also said her meetings in Canberra yesterday with the prime minister, Anthony Albanese, government ministers Don Farrell, Penny Wong and Jim Chalmers, and the opposition’s Simon Birmingham were “very productive”:

I was grateful to hear them emphasise Australia’s enduring commitment to a strong and effective World Trade Organization and to our ongoing reform efforts.