Tony Abbott and Angela Merkel announce joint working group to boost trade between Australia and Germany

Speaking at a lecture hosted by the Lowy Institute in Sydney, Ms Merkel said recent deals with Korea and Japan, today’s deal with China, and the prospective Trans-Pacific Partnership (TPP) mean Germany needs to push its European Union partners to speed up deals of their own.

“If I look at the long drawn out and arduous process on the negotiations of the trans-Atlantic trade agreement, looking at what you’re doing here encourages me to speed this up, because otherwise we will be cut off from developments in the rest of the world,” she said.

In hopes of boosting the Australia-Germany trade and diplomatic relationship, Prime Minister Tony Abbott and chancellor Merkel have established a joint working group ahead of bilateral talks in Sydney today.

The joint working group would have a dual purpose, according to Mr Abbott: it would be used to help determine how the two countries could deepen their relationship and see how the pair could cooperate in the Indo-Pacific region.

Mr Abbott said the relationship with Germany was “warm and strong” but he wanted that relationship to have better economic outcomes.

“We’ve got a strong two way trade but it can be stronger,” Mr Abbott said.

“In the 2012/13 financial year, Germany was Australia’s tenth-largest merchandise trading partner, with trade topping $13 billion.

“Of that figure though, $11 billion was for imports.”

For the same period, Australia’s investment in Germany was valued at nearly $49 billion.

Over 700 German-owned businesses and subsidiaries operate in Australia, their industries including automotive, advanced manufacturing and clean energy.

Mr Abbott added that he hoped the announcement would serve as a precursor to more trade with the European Union.

No Australian contribution to UN green climate fund

Despite the Federal Government’s focus on jobs and economic growth at the G20 summit, the global challenge of climate change was still receiving much of the attention.

In Mr Abbott and Ms Merkel’s late night press conference in Sydney, a German reporter asked Mr Abbott whether Australia would also contribute to the United Nations’ green climate fund, following US president Barack Obama’s announcement of a $3 billion contribution.

Mr Abbott highlighted foreign aid funding which already goes to climate programs, as well as the Government’s $2.5 billion emissions reduction fund, and the $10 billion allocated by the previous government to the clean energy finance corporation.

“So, we are doing a very great deal and I suppose, given what we are doing, we don’t intend, at this time, to do more,” Mr Abbott said.

However, at her Lowy Institute speech, Ms Merkel argued for stronger action to reduce carbon emissions, particularly in light of the Paris climate change talks next year.

“If we do not put a brake on climate change, it will have devastating consequences for all of us – there will be more storms, there will be more heat and catastrophes more droughts, there will be a rising sea levels an increasing floods,” she said.

“Climate change knows no borders. It will not stop before the Pacific islands and the whole of the international community here has to shoulder a responsibility to bring about a sustainable development.”

Use ‘economic might’ to subdue Russia

While he would not say if he had asked Ms Merkel to press the Russian president to apologise for the MH17 disaster, Mr Abbott did offer this tribute to his guest.

“No one understands the complexities and the difficulties of the situation on the ground in Eastern Europe better than the chancellor and I have to say I have benefited very much from her counsel,” he said.

Ms Merkel in her Lowy lecture accused Russia of violating international law, but said that the history of large-scale European conflicts means a military solution is not possible, and a resolution must be pursued diplomatically, politically and economically.

“We have economic strength and we’re called upon to also then … accept certain disadvantages for ourselves due to these sanctions, but I think economic might, economic power is one of the fortes that we have as Western nations and we ought to use this,” she added.

Mr Abbott’s international relations will continue in Canberra when he meets with Chinese president Xi Jinping.

After British prime minister David Cameron used part of his speech to Federal Parliament on Friday to rail against authoritarian capitalism in a not-too-subtle message to China, all eyes will be on Mr Xi, as he makes his own address to a special sitting of Parliament.

Mr Xi is also expected to sign a free trade agreement with Australia which has been almost 10 years in the making.