PORT MORESBY (AFP) - Trade wars benefit no one and must be solved by negotiation rather than tit-for-tat tariffs, Australia's Prime Minister said on Saturday (Nov 17) ahead of an Apec summit likely to be dominated by US-China trade tensions.

The world is facing a "rising tide of trade protectionism" and financial market volatility, Mr Scott Morrison warned in a speech to business leaders ahead of the two-day summit of Asia-Pacific leaders.

"The solution is not throwing up protectionist barriers," he said.

"Tit-for-tat protectionism and threats of trade wars are in no one's interest economically and undermine the authority of the global and regional trade rules that benefit us all."

Asia-Pacific Economic Cooperation (Apec) members the US and China have become embroiled in a trade war which experts warn could be catastrophic for the global economy, with the world's top two powers going head to head.

The pair have imposed tariffs on billions of dollars of each other's goods and there is little sign of an immediate easing in tensions, with both sides threatening to step up action if necessary.

"The solution to perceived unfair trade practices is more likely to be found around a negotiation table than it is in building a tariff war," urged Mr Morrison.

Australia would "continue to advocate for trade disputes to be resolved by negotiation and within WTO rules".

He acknowledged that the World Trade Organisation "was not perfect" and pledged to work with "like-minded countries to improve it".

Reform of the WTO is a topic that is likely to sow division at the summit.

Foreign ministers meeting ahead of the talks were unable to publish a joint statement, apparently due to differences over language on WTO reform.