Australia’s Golden Opportunity
eyes will be on Australian Prime Minister Tony Abbott this week when he addresses
the gathering of business and political leaders at the World Economic Forum in
Davos. As this year’s host of the G20, Mr Abbott has both a heavy
responsibility and a rare opportunity. The Brisbane summit scheduled for
mid-November will bring together the largest gathering of world leaders ever on
Australian soil. With energetic leadership from Prime Minister Abbott,
Australia has a chance to drive measurable progress on the critical G20 agenda
of trade, growth, and jobs. The stakes could not be higher.
the global economy is in far better shape than when G20 Leaders met for the
first time in Washington more than five years ago, challenges remain. Growth in
the United States and Japan is stronger – but not yet strong. The financial
risks in Europe have eased, but growth in the world’s largest economic area
continues to underperform. Unemployment remains stubbornly high across the
advanced world. Meanwhile, large developing markets such as China, India, and
Brazil are facing significant headwinds of their own and the urgent need for
structural reform. Against this uncertain backdrop, protectionist pressures
persist around the world.
the G20 still has a vital role to play in addressing these challenges. The G20
remains the only forum in which leaders representing more than 80 per cent of
the world economy get together to do two essential things: to advocate sound
economic policies within G20 member economies, in common pursuit of strong,
sustainable, balanced growth and job creation; and to seek international
cooperation on an array of challenges that no one country can solve alone.
Progress on the global trade agenda serves both of these objectives.
the resolve of G20 Leaders to act collectively and deliver achievements appears
to be alive and well – as evidenced in St. Petersburg when they set aside
differences on trade and rallied their support for a successful outcome on
trade facilitation at the Bali Ministerial Conference of the World Trade Organization
(WTO) in December. Those commitments held firm in Bali, and under the adroit
leadership of WTO Director-General Roberto Azevedo, yielded the historic WTO
Agreement on Trade Facilitation – one that will not only restore confidence in
the multilateral trading system but will also generate a much needed stimulus
of US$1 trillion and 21 million jobs to the world economy.
Abbott’s ability to set a focused agenda and drive this type of collective
action will be essential to demonstrating the G20’s continued relevance to
global governance and maintaining the momentum on trade.
trade so central to the global economic agenda, it is auspicious that Australia
leads the G20 this year. The country has a long history of pursuing trade
liberalizing policies and other market opening measures. It has always been a
strong supporter of the WTO and the multilateral trading system, and in
particular a strong advocate of greater agricultural trade liberalization. It
also has free trade agreements in place with eight countries (including a new
agreement with South Korea) and is currently negotiating a number of others –
including the Trans-Pacific Partnership – and bilateral arrangements with
China, Japan, India, and Indonesia. Australia’s integration with the global
economy means 41 per cent of its GDP is linked to trade.
track record, plus the leadership and resolve of Mr Abbott, make us optimistic
that the G20 can continue to advance the world trade agenda. Business is
determined to bring that same energy to helping Australia make meaningful
progress on trade in its G20 host year.
To do so, G20 leaders should issue a call to action in three areas.
is an international trade agreement in services. This would remove barriers to
global exports of tradable services, adding as much as another US$1 trillion
annually to the global economy and creating up to nine million jobs.
is the expansion of the International Technology Agreement to increase both the
number of countries and number of products covered. In 2010 exports of IT
products accounted for nearly 10 per cent of all global exports – more than
agriculture or automotive products – and that percentage is growing. Expanded
trade in technology promises to bring increased prosperity and job creation in
all nations – especially for major developing economies that wish to compete
and prosper in the 21st Century.
finally, G20 leaders should insist on greater compatibility between regional
trade agreements and WTO rules, so that no nation or region is left behind in
realizing the economic benefits of trade.
B20 and the International Chamber of Commerce, as representatives of world
business, strongly support the objectives Australia has laid out for its host
year. Bridging the gap in infrastructure investment, promoting a multinational
framework on investment and expanding finance will also be important
achievements, and the B20 and ICC look forward to working with Prime Minister
Abbott and his team in the run-up to November’s meeting in Brisbane to turn
these objectives into concrete action.
Richard Goyder AO is
Managing Director of Wesfarmers Limited and the Chair of B20 Australia. Harold
McGraw III is Chairman of McGraw Hill Financial, which has offices in Sydney
and Melbourne, and is Chairman of the International Chamber of Commerce.