Realism prevailed as China and the United States achieved substantial progress in their new round of trade consultations, a former Australian Minister said.

Warwick Smith, who was Australia’s Minister for sport, territories and local government, said that amid multiple uncertainties that are causing economic concerns globally, China and the United States made progress in their trade talks thanks to a pragmatic approach from both countries.

This “Phase One” progress showed that the two countries have the capability to make needed arrangements.

“It is important to stop the escalation of the situation” as trade frictions have started to hurt not only the two countries economically, but also the global economy, said Smith, who now serves as Director of Seven Group Holdings.

The global economy is threatened by the uncertainty with the Mideast, Brexit and trade issues, he said. “So when you can give some management of those issues, you should do so.”

Smith said Australia supports the World Trade Organisation (WTO) and the multilateral trading system with the WTO at its core.

“Australia believes that any revision or change should be done within the framework of the WTO, as the WTO is rules-based.”

Smith was in Beijing to attend the fourth Australia China Dialogue on Belt & Road Initiative Investment and Finance Cooperation. He said the Belt & Road Initiative is a platform where other countries can share the opportunities offered by China’s economic development.

In March, Australia announced the establishment of the National Foundation for Australia-China Relations, which will take the place of the 40-year-old Australia-China Council as Australia’s high profile platform to promote its relations with China.

Smith, who has been appointed chairman of the new institution, noted that China not only is his country’s biggest trading partner, but also has become an important source of foreign investment in the last few years. Australia has recognised China as a full market economy, and joined the Asian Infrastructure Investment Bank as a founding member.

The National Foundation, with a budget bigger than the Australia-China Council, will be able to go beyond the traditional education, art and cultural sectors and give more weight to bilateral cooperation in new areas such as agriculture, infrastructure, energy, health and environment, he said.