Interview: Free trade delivers better outcomes than closed trade: Australian economist

Source: Xinhua| 2019-07-11 20:58:33|Editor: Wu Qin
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by Chen Yu

SYDNEY, July 11 (Xinhua) -- A top economist at a large Australian financial services company has praised China's commitment to open trade, saying that it will provide better outcomes globally than closed trade.

Shane Oliver, head of the investment strategy department and chief economist at the Sydney-based AMP Capital, told Xinhua Wednesday that historically, free trade has been shown to deliver better outcomes than closed trade.

"Free trade has helped the global economy in a lot of ways, it provided cheap goods to get to the more developed countries, it's kept inflation low, it's kept interest rates low, it's led to higher standards of living," he said.

"It would be a big worry for the world economy if free trade were curtailed because it would make it a lot harder for emerging countries to develop but it would also mean higher prices for consumers in advanced countries."

"I think the fact that China is committed to free trade and the world trade system (and) that's a positive thing."

With roughly one third of its exports going to China, Australia is vulnerable to the impacts of a dispute between China and the United States, although so far the impacts have been offset by sustained high prices Australia's main export commodities including iron ore, gas and coal.

"Australian exports have been doing OK but obviously if the trade war continues and global growth slows then that would affect Australian exports and imports, at a time when the Australian economy has slowed down," Oliver said.

"The last thing Australia wants is the trade war to worsen and to threaten the global economy, that would then double up the downwards pressure on the Australian economy."

Oliver believes that an agreement would be mutually beneficial and can be reached as long as negotiations continue between the world's two great economic superpowers.

"This can only be solved through negotiation," Oliver said.

"As long as the negotiation can be continued in good faith, honesty and mutual respect that's probably the only way it can be resolved."