Trade on agenda for PM visit: Cormann

Finance Minister Mathias Cormann says the prime minister will “obviously” call on the US to try and resolve its trade issues with China during an official trip to Washington.

Labor has urged Scott Morrison to use his visit to push for an end to the damaging trade war as a new report showed it is endangering the outlook for global economic growth.

“We obviously always call on both the US and China to resolve their issues as swiftly as possible because that is in Australia’s interest,” Senator Cormann told Sky News on Friday.

“We believe it is in the interest of the United States and China and indeed it is in the interests of nations around the world.”

Mr Morrison arrived in the US on Thursday (Friday morning, Australian time) at the start of a week-long visit, including a state dinner with Donald Trump.

The Organisation for Economic Cooperation and Development warned escalating trade policy tensions are taking an increasing toll on confidence and investment, and endangering future growth prospects.

In its interim Economic Outlook released on Thursday, the Paris-based institution cut its forecasts for world growth and slashed its predictions for Australia for this year and next.

It now expects Australia to grow at just 1.7 per cent in 2019, only just above the 1.4 per cent recorded in the year to June, and lower than a forecast 2.3 per cent expansion in its Economic Outlook in May.

It also cut its forecast for 2020 to two per cent from 2.5 per cent.

The OECD said growth in Australia has moderated by more than expected this year, in part due to persistently weak global trade and soft import demand in China.

“These factors are expected to persist, but recent steps to ease macroeconomic polices should support domestic demand growth in 2020,” it said.

Financial markets see a strong chance of the Reserve Bank cutting the cash rate again to 0.75 per cent from one per cent next month, following Thursday’s unexpected rise in the jobless rate to 5.3 per cent from 5.2 per cent.

Most of the jobs growth in August was also in part-time rather than full-time work.

But Senator Cormann put a positive slant on the result, pointing to a record number of Australians that are looking for work, or coming back into the workforce.

“That shows Australians have great confidence in the future of the Australian economy,” he told ABC television.

AAP

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