Australian PM: For Upcoming G-20 Summit, "Trade Comes First"
Australian Prime Minister Tony Abbott made a strong public call at last week's World Economic Forum in Davos, Switzerland, for G-20 members to put free trade "first" as they work to sustain the momentum of the global economic recovery. Australia is the holder of this year's G-20 presidency, taking the helm from Russia, with the annual leaders' summit scheduled for November in the city of Brisbane.
Developed countries have shown increasingly consistent signs of improvement in recent months, and recent data also indicates steadier growth in developing countries. Economists warn, however, that this progress has yet to solidify into a lasting trend, and policymakers should remain vigilant against potential risks.
"It was the G-20 which helped to coordinate the actions which prevented another great depression," Abbott told his audience at Davos. "The challenge, as we continue to work through the weaknesses that brought on the crisis, is to strengthen governance without suppressing the vitality of capitalism.
The Group of 20 major industrialised and developing economies declared itself the "premier forum" for global economic cooperation during the early years of the financial crisis, a pledge that has since drawn attention - and sometimes criticism - as to what should fall under the G-20 agenda and how effective its commitments are in practice. Abbott stressed in Davos that this year's summit, like last year's, "must be more than a talkfest," promising to hold a "frank leaders-only discussion."
In these talks, he said, trade should come first. The Australian Prime Minister also said that G-20 members should continue working to combat tax avoidance by large companies, increase infrastructure investment, reduce unemployment, and improve financial sector resilience - all major topics at last September's summit in St. Petersburg.
Abbott is only a few months into his term as Prime Minister, after his party cruised to a landslide victory over Labor in September. Hosting the G-20 summit is seen by some analysts as a key test for the Australian leader's foreign policy credentials.
Back home, Abbott has focused primarily on starting the repeal process for two controversial taxes - one on carbon emissions, another on mining - that were enacted during the term of predecessor Julia Gillard. He has said that removing such taxes are key to boosting private sector growth and employment, a claim he reiterated at Davos, though critics have said that these planned repeals would undo some of Australia's most significant climate mitigation advances in years. (See Bridges Weekly, 12 September 2013)
In Davos, the Australian leader also pressed his fellow G-20 leaders to - at the very least - renew their existing commitments against protectionism, noting that his country will "make the most of its G-20 presidency to promote free trade." He also pushed them to commit to liberalise trade via new agreements on a bilateral, plurilateral, and multilateral level.
Last September in St. Petersburg, G-20 leaders had agreed to extend to 2016 their "standstill commitment" against raising or imposing new barriers to trade and investment, a pledge that was first made during their 2010 summit in Toronto, Canada. The group also reaffirmed its promise to "rollback" new measures that may have arisen since the crisis. (See Bridges Weekly, 12 September 2013)
However, recent WTO data on G-20 trade restrictions has found that such measures are actually on the rise, with 116 new ones reported between mid-May to mid-November - compared to 109 restrictions in the previous period.
The December report had also noted that trade flows in 2013 were lower than originally anticipated, warning that while 2014 would likely yield improvements, trade growth would still be below historical levels.