Trade deal step to reform, says BHP chief Mike Henry
BHP chief executive Mike Henry says Australia must use the signing of a major regional trade agreement as a springboard for national leaders to meet face-to-face.
BHP chief executive Mike Henry says Australia must use the signing of a major regional trade agreement as a springboard for national leaders to meet face-to-face, saying it is in the national interest to “work with our partners”.
In a keynote speech opening The Australian’s Strategic Forum on Wednesday morning, Mr Henry will say our country has done well through the global health crisis that has killed more than 1.2 million people and cost the world economy $US5.5 trillion, but that Australia needs to face some “pretty tough realities”.
Among these is the fact that, the longer economic activity is “constrained” by COVID-19, the longer it will take to return to full employment. Mr Henry will also warn that by “quite correctly seeking to protect the present, we have accumulated a debt that if mismanaged could be a significant drag on the future”.
“A successful Australia post-pandemic will need to be more competitive, more future-facing, and better connected,” he will say, and the necessary reform “cannot be carried by government alone”.
“All of us, including businesses, need to play an active part in supporting the reform agenda.”
Mr Henry will also say Australia’s escalating trade tensions with its largest trade partner, China, threatens about 40 per cent of our exports. Longer-term, China’s demand for our resources “may begin to plateau”, while the “decarbonisation megatrend” may mean lower structural demand for energy commodities.
Mr Henry will say that Australia’s export dependence has helped cushion the blow of the COVID-19 recession, “thanks in part to the strength of the economic recovery in China, which accounts for around 40 per cent of our exports”.
The nation’s growing reliance on China has come despite escalating tensions between Australia and the Asian powerhouse, which have led to a series of trade restrictions this year on a variety of goods, including most recently timber, but also on wine, beef, barley, thermal coal and wheat exports.
And at a time of strained global ties amid a devastating pandemic, “Australia is positioned to demonstrate to others the importance of investing in relationships and the power of trade”, Mr Henry will say.
“The Australian government’s leadership together with China and other nations to finalise RCEP (the Regional Comprehensive Economic Partnership) is such an example,” Mr Henry will say. “The opportunity ahead is to not only implement RCEP effectively but also to build on the momentum created by the agreement.
“This will generate new opportunities for collaboration and to reinvigorate important relationships, including possibly taking the first available opportunity for national leaders to meet face-to-face to celebrate their accomplishment and forge even closer ties.”
Mr Henry will say that COVID-19 has intensified trends which are critical to the mining giant and that decarbonisation has taken on a greater priority after recent commitments from China to reduce net emissions to zero by 2060, closely followed by similar announcements from South Korea and Japan.
European leaders are taking steps towards a “green recovery”, while the incoming Biden administration in the US will bring a new focus on climate change in the world’s most important economy, Mr Henry will say.