Head of World Trade Organization warns of ‘slippery slope’ to nuclear war

Daniel Hurst

Daniel Hurst

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.

Key events

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Former Coalition finance minister Mathias Cormann delivered the OECD economic monitor overnight and – spoiler – things are dicey.

The treasurer Jim Chalmers had some thoughts:

The OECD report warns the global economy has been sent reeling by the largest energy crisis since the 1970s brought about by Russia’s war against Ukraine.

Slowing growth, high and persistent inflation, and falling real wages are all wreaking havoc in major economies, leading to a blunt and brutal application of monetary policy by the world’s central banks.

While we’re better placed than most, our economy isn’t immune from this hostile and hazardous outlook.

The Government takes seriously the OECD’s warning when it comes to making sure that fiscal policy doesn’t make the job of monetary policy harder – that’s why our Budget was carefully calibrated to deal with the inflation challenge in our economy.

Our economic plan delivers responsible and targeted cost-of-living relief, doesn’t add to inflationary pressures, and begins the hard yards of Budget repair.

We welcome the OECD’s support for the Government’s investments in cleaner, cheaper and more reliable energy.

‘Wages not moving at all is a disaster’ – Bill Shorten

Bill Shorten is then asked about RBA chief Philip Lowe’s warnings against a pay rise spiral in the context of inflation.

Shorten asks why is it people earning over $100,000 who say people earning under $100,000 don’t deserve a pay rise.

It all depends what the wage rise is. The reality is that when you’re getting your electricity bill every quarter, when you get your gas bill every two months, when you’ve got the increased costs of the kids going to school, when you’ve got the mortgage payments to where the RBA is increasing the interest rates, you can’t get blood out of a stone. Real people are hurting without some wages movement.

These wages changes aren’t going to lead to double digit increases [and increase inflation], like it’s just rubbish.

That’s not what’s happening. So a lot of these debates are theoretical.

If wages move too far too fast, that’s not desirable, but wages not moving at all is a disaster.

At the end of the day, I’m watching these Coalition conservative politicians and some of the senators, you know, stroke their chins and opine how terrible it is if wages go too far.

The problem is wages are not going too far. The problem is they’re not moving at all.

The problem is that we’ve got an energy shock caused by the conflict in Ukraine.

The problem is we’ve had people fall behind. This isn’t a question that the wages system will unlock faster than inflation wage rises.

I do not believe that is the case at all. But where you’ve got inflation going up 7.5% and wages aren’t moving at all, that’s a seven and a half percent wage cut.

Why is it that the experts who complain about people on less than $100,000 a year getting wage rises – they’re not the ones who are under $100,000 a year.

Bill Shorten said he believed it would take years for people to be able to move on from the floods:

… When I walked down the streets where people return the morning after the floods … and you just hear literal wails of despair, cries of despair, you just– it is a big deal.

It’s a massive deal and it’s not easily resolved. And so what it reminded me of is, at least to the extent that I can control any of the relief and support is to make sure that we get payments out to people we take try and take as much of the bureaucracy out of people already dealing with trauma out of their lives.

Floods cost will run into millions, Bill Shorten says

The government services minister, Bill Shorten, is speaking to ABC radio RN Breakfast host, Patricia Karvelas, and says it is too early to put a dollar figure on how much the floods will have cost.

I don’t think we can yet.

But the costs are enormous. You’re quite right. There’s the individual cost when you have flood damage and water across your floorboards. It is nothing short of a disaster.

Businesses are interrupted. There are farmers who were looking forward to their first really good season in the long time, and that’s been heartbreaking. There’ll be insurance claims, there’s of course government payments to try and help people temporarily mitigate some of the effects of the flood so it’ll run into hundreds of millions, if not billions of dollars.

Independents to launch report on whistleblower protections

Independent MP Andrew Wilkie has been arguing for more protections for whistleblowers for years. The attorney general, Mark Dreyfus, has proposed new laws to boost whistleblower protections, but there are still calls the law needs to go further.

Two of Australia’s whistleblower experts, Prof A J Brown and Kieran Pender (who has written for the Guardian) have written a report on what needs to happen:

Protecting Australia’s Whistleblowers: The Federal Roadmap draws on landmark research and synthesises three decades of reviews to outline a comprehensive, 12-step roadmap for better protecting and empowering whistleblowers.

That report is being launched in parliament today, in an event being hosted by Dr Helen Haines and David Pocock

The report includes recommendations on what Australia needs to do, including:

  • Upgraded whistleblower protections for Australian public servants in line with domestic and international best practice, including a positive duty to protect whistleblowers and steps to make it easier for whistleblowers to enforce their rights;

Paul Karp

Paul Karp

Inequality in Covid deaths

The assistant treasury minister, Dr Andrew Leigh, is delivering a speech on inequality in Covid deaths on Wednesday night, in his capacity as assistant minister responsible for the Australian Bureau of Statistics.

In the WD Borrie Lecture, Leigh will note that deaths from Covid were disproportionately concentrated among disadvantaged communities: more than three times higher in disadvantaged neighbourhoods, twice as high among people born overseas, and nearly twice as high for Indigenous Australians.

In an advance copy of the speech, Leigh says:

The mortality ratios from Covid in Australia are quite similar to those estimated in other advanced nations. As a share of the population, fewer people died from Covid in Australia than in most other affluent nations. Yet among those who died, the same health inequalities can be seen in Australia as in other advanced countries.

What might have driven the socioeconomic disparities in Covid mortality? And why might many of those disparities have been largest in the Delta wave? As I have noted, disadvantaged people may be less able to work remotely, more reliant on public transport, and more likely to live in crowded households. Uptake of vaccination and antiviral treatments have varied across society as vaccines and treatment became increasingly available. Another factor is that successive Covid waves have had varying degrees of severity. A final factor is that in the years since Covid began, population immunity has steadily risen.”

Leigh also gives the following profile of those who died:

Across all waves of the pandemic, deaths from Covid were highest among those aged 80‑89 years. The median age of those who died from Covid was 87.4 years for females and 83.6 years for males. Males had a higher number of registered Covid deaths than females. For every 100 female Covid deaths, there were 126 male Covid deaths. Around 3-quarters of all Covid deaths occurred in Victoria and New South Wales.

Head of World Trade Organization warns of ‘slippery slope’ to nuclear war

Daniel Hurst

Daniel Hurst

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.

‘Change in tone and mood’: deputy PM meets Chinese defence minister

Daniel Hurst

Daniel Hurst

The deputy prime minister, Richard Marles, has met with the Chinese defence minister at a regional summit and stressed the importance of maintaining lines of communication between their militaries.

Marles is in Siem Reap, Cambodia, for the Asean defence ministers’ meeting-plus to be held today.

In the latest sign of the easing in tensions between China and Australia, Marles met yesterday with China’s defence minister, Wei Fenghe, whom he first met in Singapore in June when a freeze on ministerial talks ended.

According to a readout issued late last night by the Australian side, the two ministers “acknowledged the significance of what was their second meeting since the change of government in May this year” and “discussed regional defence relations and Indo-Pacific security”. The readout said:

The pair advanced discussions they commenced in June about reinstating the defence dialogue between the two countries. The deputy prime minister explained that Australia would welcome the reinstatement of that dialogue, and reiterated the importance it has played in the bilateral relationship previously, particularly in maintaining lines of communication between the two nations’ militaries. Both ministers were optimistic about progressing that further.

The deputy prime minister said the meeting [was] an important step in stabilising Australia’s relationship with China, and welcomed any future opportunities to meet with General Wei.

In a statement last night, Marles said there was an important “change in tone and mood in our exchange”.

We both remarked on the degree to which we’ve come a fair way over the last few months in trying to stabilise the relationship and put it in a better place.

We spoke about the possibility of further engagement back in June and we raised it again today. I’m hopeful we can get things back to a better place, and dialogue with senior officials in Defence is part of that.

The latest meeting follows Anthony Albanese’s summit with China’s president, Xi Jinping, in Bali last week. Marles also had bilateral meetings yesterday with his counterparts from India, South Korea, Thailand, Cambodia, Laos and Indonesia.

Philip Lowe says Reserve Bank is watching wages growth in other economies

The RBA Governor, Dr Philip Lowe, gave a speech in Melbourne overnight, where he warned against a “price-wage spiral”, which he said would impact inflation.

You can read the whole speech here, but this is a short excerpt:

Domestically, we need to avoid a price-wage spiral. To date, while wages growth in parts of the private sector has picked up materially, aggregate wage outcomes in Australia have been consistent with a return of inflation to target. In contrast, a number of other advanced economies are experiencing much faster rates of wages growth. So this is an area we are watching carefully.

Tanya Plibersek was on ABC News Breakfast this morning and was asked about the comments and said:

I am not going to make any comments about the Reserve Bank governor but it hasn’t been painless. It has been a very difficult time for families. The cost of everything is going up. Their wages haven’t kept pace. We know the reason wages didn’t keep pace under the previous government was they said low wages were a deliberate design feature of their economic architecture and when the shadow treasurer was asked whether he supported the industrial relations changes recently, he said no because they will see wages go up.

In contrast, on our side, the government wants to see wage increases, particularly for those low paid workers who have missed out. They have seen the impacts of price rises and they are coping with higher mortgages and rental costs as well. We know life has been tough and we want to make it easier by giving them a pay rise when they work hard.

Paul Karp

Paul Karp

Greens to push for ‘right to disconnect’ from work

Australian workers are on average working six weeks unpaid overtime a year, costing them over $92bn dollars in unpaid wages.

That is the conclusion of the Australia Institute’s Centre for Future Work report released on Wednesday, which is “go home on time day”. The average worker is losing over $8,000 a year or $315 per fortnight, it found.

The research reveals that employers are profiting from 2.5bn hours extra hours of work. Permanent workers, whether full or part-time, are generally paid salaries that account for all hours worked, as opposed to casuals paid by the hour.

But the Centre for Future Work regards the 4.3 hours of unpaid work the average employee performs every week as a form of “time theft”, amounting to 224.3 hours a year for every worker, or six standard 38-hour work weeks.

Eliza Littleton, research economist at the Australia Institute and report author, said:

Our research shows unpaid overtime is a systemic, multibillion-dollar problem which robs Australian workers of time and money. This is time theft. Unpaid overtime harms our quality of life and reduces our time with family, friends, and those we care for.

Time theft only further exacerbates our current cost of living crisis. With workers’ share of national income at the lowest point ever, a focus on reducing unpaid overtime would improve quality of life and ease the cost of living pressure for millions.

The prevalence of overtime suggests that ‘availability creep’ has eroded the boundaries between work and life.

The Australia Institute is calling for the creation of a right to disconnect, which was recently recommended by the Senate select committee into work & care chaired by the Greens’ Barbara Pocock.

The issue isn’t directly dealt with in Labor’s industrial relations bill, which does create a right to request flexible work backed up by Fair Work Commission arbitration. The Greens will push for the right to disconnect to be included in future workplace legislation.

Worsening extreme weather events on the way, BoM and CSIRO say

Extreme weather events including torrential downpours, searing heat and dangerous bushfire conditions are all getting worse across Australia, with even more challenging events to come, according to the latest report by the BoM and CSIRO.

That said, there was relief in NSW’s saturated central region, where residents in Deniliquin breathed a sigh of relief as a flood warning was cancelled.

Showers are beginning to clear across NSW today after weeks of heavy rain but flood recovery efforts in the state’s central west and Riverina regions have only just begun.

The Bureau of Meteorology says the interrupted weather patterns are continuing, with a late-season burst of cold and windy weather moving over south-east Australia.

Popular ski town Thredbo recorded the highest rainfall this week with 186.2mm, as well as the highest wind gusts across the state with 102km/h.

In a reprieve for flooded towns, showers will become more isolated and contract to coastal and mountain areas.

A high pressure system will develop over southern Australia from Wednesday, bringing a gradual clearing of conditions and warmer temperatures later this week.

Good morning

Welcome to Wednesday! And a big thank you to Martin for starting us off.

This week just never seems to end.

It is still all about IR. With some national anti-corruption commission and privacy thrown in for good measure.

The back and forth between Tony Burke and David Pocock continues. While that is going on, Burke is also having to deal with mounting campaigns from industry and the opposition, who feel they have been dealt back in to the national conversation with this legislation.

It’s a bit of a mess, but hey that’s the Australian parliament!

We will continue following all of the moves as the issue inches towards a resolution. The Senate has already agreed to sit an extra two jam packed days to try to get through everything, but it may still need more.

Woohoo!

You have Katharine Murphy, Paul Karp, Josh Butler and Daniel Hurst watching Canberra for you. Mike Bowers is still on assignment (we miss you Mikey!) and you have a four-coffee Amy on the blog. Being Wednesday, I have about one-quarter of my brain left. Good times.

Ready?

Let’s get into it.

Daniel Andrews won leaders debate, according to poll

Undecided Victorian voters have awarded the premier, Daniel Andrews, a narrow victory over Liberal counterpart Matthew Guy in their first and only leaders debate of the election.

You can read Benita Kovolo’s report, here:

AAP reports that in a bitter election campaign, the pair largely showed restraint as they faced off before 100 undecided voters at the Box Hill town hall last night.

It took about half an hour for the pair to trade blows, with the Coalition’s plan to quarantine all new gas discovered in Victoria for state-only use the source of contention.

Victorian Labor premier Daniel Andrews and opposition Liberal Leader Matthew Guy ahead of the leaders debate in Melbourne.
Victorian Labor premier Daniel Andrews and opposition Liberal Leader Matthew Guy ahead of the leaders debate in Melbourne. Photograph: Ian Currie/AAP

Labor has been running attack ads on social media in the lead-up to the 26 November poll claiming the Liberals will overturn the state’s constitutional ban on fracking.

Host Kieran Gilbert asked the Labor leader whether he would commit to pulling the ads but Andrews was adamant it wasn’t misinformation.

The premier cited reports from the state’s chief scientist that there are currently “no proven and probable onshore conventional gas reserves in Victoria”.

“The only way you can deliver a ‘gas-led future’ is to frack. That’s just a fact,” Andrews said.

But Guy said another report from the chief scientist found up to 830PJ of onshore gas was ready and waiting to be unearthed through convention means.

“I’m not here for petty name-calling … We’re not going to frack,” he said.

The combatants later sparred over integrity and Victoria’s mounting debt, but ultimately the discussion circled back to health.

Given the opportunity near the end of the hour-long debate to ask questions of one another, Andrews went on the attack.

Welcome

Martin Farrer

Martin Farrer

Good morning everyone and welcome to our politics live blog. We’ll be getting into the meat of things very soon but first up here are some of the top stories this morning (other than the Socceroos v France, of course).

  • The Albanese government has fast-tracked a final vote on the territory rights bill in a bid to shore up its chances of passing industrial relations law changes this year. It sets up a marathon sitting fortnight as the government rushes to pass bills such as its IR reform.

  • The current intense political bargaining in Canberra was given interesting economic context in a speech by Reserve Bank chief, Philip Lowe, last night. He warned that interest rates could be set for a period of volatility as globalisation recedes and the world copes with climate change, spelling uncertainty for Australian households. After years of low inflation, the recent surge in prices had been “quite a shock”, Lowe said.

  • Geopolitics, inflation and climate also play a central part in social cohesion as the latest snapshot of Australian society by the Scanlon Foundation shows. Its study finds that cohesion has reduced since the pandemic – when it spiked – and that those big international factors play a big part in making people less comfortable in society.



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