Business calls for a free-trade blitz to create jobs

RIO Tinto chief Sam Walsh has urged the world’s business leaders to press for a fresh round of free trade deals to drive jobs creation.

RIO Tinto chief executive Sam Walsh has urged the world’s premier economic forum to press for a fresh round of free trade deals to drive jobs creation and unleash a “huge amount” of capital that is sitting on the sidelines.

As the B20 summit of world business leaders in Sydney vowed to focus on jobs creation — and as Australia pursues a free trade deal with China — Mr Walsh called on the Group of 20 leaders to move on trade and infrastructure.

“There is a huge amount of capital currently on the sidelines that could be deployed to fund new operations, new infrastructure and new ventures,” Mr Walsh told The Australian.

“G20 leaders need to focus on the policies that will unleash this investment and in turn generate economic growth.”

Mr Walsh’s comments came as his counterpart at BHP Billiton, Andrew Mackenzie, declared that a deal on slashing trade barriers would “start to address the scourge of youth unemployment”.

Mr Mackenzie said it was clear that policy and agreements had failed to keep pace with 21st-century global trade, at the same time that levels of indebtedness among individuals and developed countries was “something we need to reduce”.

“As a world, we face the fact we are not growing as much as we once did,” he said.

However, trade was the “true” opportunity for economic growth among the bloc of advanced and developing nations that made up the G20, he added.

In a signal of business-­community anxiety about lower than expected growth rates in the global economy, B20 Australia chairman Richard Goyder pointed to recent calls by bodies including the IMF and World Bank for structural reform within countries. “It’s about jobs,” said the Wesfarmers managing director.

Mr Goyder, who oversees one of the nation’s biggest employers, spanning the Coles and Bunnings chains, warned that Australia was not immune to the global growth problem. “The world has got anaemic growth and in some parts of the world negative growth; as a consequence there is significant employment issues around the globe … Australia is not immune,” he said.

Australia had to “get our own house in order on a number of fronts”, he added, although Australia was well-positioned.

On trade, Mr Goyder took aim at the rate of progress on implementing last year’s Bali deal to lower trade barriers and criticised nations that had actually imposed extra barriers. “The Bali trade agreement is a significant step forward in the whole trade agenda but as I understand it, not one of the countries that signed up to that has yet passed the enabling legislation,” he said.

Echoing the views on trade, Mr Walsh said the economic partnership agreement that Australia had signed with Japan, our second-biggest trading partner, and the free trade deal with South Korea, were examples for other G20 nations to emulate.

The proposed Trans Pacific Partnership would stimulate investment, he added. “We need to ensure any trade agreements deliver practical outcomes that provide real benefits,” Mr Walsh said. “One of the best ways to do this is to make sure business is consulted along the way as this helps transparency and consistency.”

According to work cited by Mr Mackenzie, who is the co-ordinating chairman of the B20 trade taskforce, the trade recommendations being presented this week could generate up to $US3.4 trillion in GDP growth and support more than 50 million jobs across the G20 economies.

Mr Walsh said infrastructure, too, would be a “top-level” issue in this week’s B20 forum and he backed the budget on this front.

Senior business leaders will deliver their final recommendations to Tony Abbott, Joe Hockey and Trade Minister Andrew Robb tomorrow, though the group has left alone the controversial issue of profit-shifting.

The recommendations will fall under four themes: structural flexibility, free movement across borders, consistent regulation, and credibility in commerce.

Business leaders attending the forum backed Mr Walsh’s comments about capital sitting on the sidelines. Telstra chief executive David Thodey said: “We know there’s no lack of funding in the world … funding has been pretty good, but we’re not seeing private capital flow through to these big infrastructure projects.”