Our commitment to trade and investment has built great resilience into our economy. It has helped us develop the high standards of living we enjoy and is an important reason for an unprecedented 23 years of uninterrupted economic growth. In 2013, the Australian economy grew 2.4 per cent. Of that, our net exports contributed 1.9 per cent.
The Abbott government is deliberately pursuing an aggressive trade and investment agenda. It’s an approach that has already paid dividends with the landmark bilateral trade agreements with Korea and Japan, two of our three biggest export markets. An agreement with our biggest trading partner, China, is also a prospect this year.
The deals with Korea and Japan form part of our commitment to economic diplomacy. Japan is an economic heavyweight, the third-largest economy in the world, worth about $5 trillion.
It is a vital, long-standing and highly complementary trading partner for Australia. Two-way trade stands at $70.8 billion in 2013. The agreement affords Australia significantly improved market access across a broad spectrum of areas including agriculture, energy, and resources and services.
Korea is the fourth-largest economy of Asia and has seen rapid economic growth over recent decades. It is our fourth-biggest trading partner; two-way trade exceeds $30 billion. The Korean agreement is of the highest quality in terms of widespread liberalisation. If we also conclude an agreement with China, this north Asia trifecta will be a significant fillip for Australia’s future economic growth prospects and living standards.
This illustrates why we have made trade and investment two key elements of our agenda in this, our G20 host year. This means working together to further strengthen and liberalise the global trading system. Importantly, the G20 is not a negotiating forum but a leadership forum and as chair, Australia intends to lead by example.
Each country is being asked to nominate the policy reforms they will take unilaterally to drive a 2 per cent boost in growth in their country over the next five years.
To this end, on Saturday I will chair the G20 trade ministers’ meeting and will take the opportunity to promote the clear domestic policy measures we are adopting to stimulate further growth and job creation in our economy.
Among these measures are getting rid of destructive taxes such as the carbon and mining taxes, serious attacks on red and green tape, repairing the federal budget, the streamlining of approval processes for major projects, the reform of the construction and shipping industries to enhance productivity and record levels of infrastructure investment.
This includes the government’s innovative infrastructure recycling program, which will see states and territories offered multibillion-dollar bonuses if they privatise assets, with proceeds being redirected into new and more productive infrastructure. In my meetings abroad this initiative has certainly captured the imagination of international investors.
I am asking my G20 counterparts to present equally ambitious and innovative domestic strategies.
We will also seek consensus on those things we can do collectively as trade ministers to contribute towards meeting the commitment to lift combined GDP by more than 2 per cent over five years. This would add in the order of $2 trillion to the global economy and create many millions of jobs.
As I have travelled in my role, I have sensed a growing disillusionment with the interventionist, big government policy responses to the global financial crisis. The debt-fuelled spending adopted by governments globally, including Australia, has not delivered sustainable economic growth or staved off rising unemployment.
There is a new appetite in many countries to live within their means while pursuing trade and investment as the drivers of growth and job creation. I hope to capture this sentiment among G20 trade ministers and secure consensus to pursue high-level reforms to support this approach.
As leading global economies, the things we can subscribe to include doing more to wind back protectionist measures imposed since the global financial crash, strengthen “aid for trade” commitments and provide greater transparency in global trade rules to give business the confidence to trade and invest.
The earliest possible implementation of the WTO trade facilitation agreement is crucial to shoring up these rules, as is working purposefully to support WTO director-general Roberto Azevêdo in finally concluding the Doha round.
The pursuit of ambitious bilateral, regional and plurilateral trade agreements should also be embraced as they are important building blocks in the global trading system. These represent more and more structural adjustment in different countries, more market openings. Eventually the wall of building blocks grows into a virtual multi-lateral type outcome.
G20 trade ministers have an opportunity to be bold in what they do, at home and jointly, to herald a new phase of trade and investment. As Australia’s experience shows, trading, open nations are also prosperous ones.
- Trade Minister's Office: (02) 6277 7420
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