The Australian Financial Review's Lisa Murray and Angus Grigg have identified one consequence associated with the drawn-out election results. Australia may not have our Trade Minister represented at upcoming two-day G20 trade ministers meeting in Shanghai on 9-10 July.
But, assuming we are in a position to send a ministerial representative, how much should we expect out of the meeting? There are reasons to be hopeful, but not overly so.
The headline rhetoric coming from China is positive, and trade and investment issues have been a priority of the 2016 Chinese Presidency. Against a backdrop of perpetually low trade growth, Vice Minister Shouwen Wang from China's Ministry of Commerce stated that the G20 is working on a 'G20 global trade growth strategy'. This strategy is focused on improving global trade governance, reducing trade costs, enhancing trade and investment policy coordination, promoting trade in services, enhancing trade financing, creating a 'global trade prospect index' (still to be clearly defined), and establishing an inclusive global value chain. And, if all that wasn't enough, there is also a suggestion about promoting e-commerce. So the tradition of bold, ambitious language ahead of G20 meetings continues.
But we have been here before and we know well-meaning rhetoric does not necessarily lead to action. Regardless of how Turkey tried to spin it, the last trade ministers meeting, held in Istanbul in October, was overshadowed by the absence of a number of trade ministers who were in Atlanta, settling the terms of theTrans-Pacific Partnership. The previous meeting in Sydney, on 19 July 2014, coincided with the downing of Malaysian Airlines Flight 17 and led to the Russian Trade Minister being summoned to meet with Australian Prime Minister Tony Abbott so Abbott could convey Australia's position on the shooting down of the plane and other concerns.
Rather than substantive advances on the future of the multilateral trading system and the role of the WTO, trade ministers have focused on small advances across a laundry list of issues. Instead of agreed communiques, chair's statements have been produced, although these have not argued the case for trade liberalisation. The meetings have misunderstood the G20's strength in providing strategic leadership to international organisations, providing political momentum to overcome roadblocks, and advancing truly global issues in international forums and institutions.
There can be a better way.
In Shanghai, trade ministers would ideally start by issuing a strong joint, high-level statement about the importance of trade growth, composed to connect with the average citizen. The positive economic logic in terms of economic growth and productivity benefits should not be too difficult to make, as recent research and speeches by the IMF highlight. Equally, it's clear trade and investment liberalisation creates losers as well as winners and the G20 should be upfront about this as well. This means acknowledging the need for policy response that enters into domestic realms such as social safety nets, targeted assistance, supportive labour market policies, and retraining. In such matters, the G20 can contribute to global norm-setting but national governments have to take primary responsibility for persuading citizens of the benefits of globalisation. Creative solutions need to be found, and this should be the key focus of trade ministers' discussions.
Trade ministers should also, at a minimum, look to reaffirm the long-standing agreement for a standstill against protectionist measures. This agreement, originally announced at the trillion dollar London Summit, remains one of the G20's most important successes. It would be remarkable if it could be strengthened through a commitment to roll-back the growing number of protectionist measures that have, notwithstanding the agreement, been implemented since 2009. The unfortunate truth is that, as Brexit and the US presidential race have highlighted, many G20 members' focus will need to be on warding off the worst impacts of greater trade barriers and a rising domestic tendency towards protectionism.
For decades Australia has been well served as a medium-sized, open economy, and we have a good message against protectionism. We also have a strong stake in the sideline discussions on steel markets, a saga that seen the US accuse China of dumping subsidised steel in global markets and China concerned about the 500% steel tariffs imposed by the US.
So it would be a missed opportunity if Australia did not participate in the Shanghai meeting. Election cycles are a natural matter for many G20 countries but we should be more alarmed at the recent trend of Australian non-participation at G20 meetings, such as the Treasurer's repeated absence at Finance Ministers gatherings.
Photo courtesy of Flickr user Downing Street