Of the alphabet soup that makes up the G20's many engagement partners, the B20 (Business 20) is arguably the most important. Bringing together representatives from the largest international companies within the largest economies of the world, the B20 offers a unique opportunity for business leaders to articulate a clear set of priorities for the global economy and actively contribute to the G20's policymaking process.
In the run up to the 2014 Brisbane Summit in November, the B20 held its own summit last week in Sydney, seeking to influence policymakers on a range of issues from trade and protectionism to infrastructure and financial regulation. The summit drew more than 400 business leaders from the likes of UBS, Credit Suisse, News Corp, Google and BHP, with a number of Australian companies filling out the Leadership Group.
The final blueprint includes twenty recommendations to kick start global economic growth and trade. Richard Goyder, the B20 Australia Chair and CEO of Wesfarmers, struck a decidedly optimistic tone. "Our analysis suggests that if these were adopted, the G20 would not only meet, but exceed the two percent additional growth target set by G20 Finance Ministers in February," he said. A failure by the G20 to embrace these reforms, on the other hand, "will mean a significant opportunity cost."
Top of the agenda is for the G20 leaders to implement the WTO Trade Facilitation Agreement, which aims to cut down inefficient customs procedures and regulatory barriers to trade. It was concluded as part of the "Bali Package" in December 2013 but is yet to be ratified by all 160 WTO members. The group suggested offering financial and capacity-building assistance to developing countries in order to secure wider support for implementation. Easing supply chain barriers through country-specific strategies and regulatory reform was another proposal to help ease the flow of goods across borders.
One of the key priorities for the G20 under Australian leadership has been encouraging greater investment into long-term infrastructure projects that can raise productivity and spur job creation. This not only helps bridge the policy gap between developed and developing countries but opens up a much greater role for the private sector. Playing to its strengths, the B20 came up with a raft of suggestions, from setting five-year investment targets according to national strategic visions to establishing national infrastructure pipelines with projects assessed and prioritized by independent authorities. In both cases, the hope is that such infrastructure initiatives will draw heavily on private-sector finance and expertise.
More contentiously, the B20 called on G20 governments to reaffirm their commitment to anti-protectionism first made at the 2008 Washington Summit and, crucially, to also wind back the restrictive measures such as non-tariff barriers that have steadily increased since then. There has been growing pressure on the G20 and Australia, in particular, to take a bolder position in support of genuine trade liberalization. To this end, one of the more striking recommendations made by the B20 was for a Model Investment Treaty. The aim is to provide a common and unified approach to foreign direct investment and cross-border capital flows, streamlining the more than 3000 investment treaties currently in existence.
In his address to the summit, Prime Minister Tony Abbot was borderline reverent of the results-driven private sector. "The G20's job is to promote policies that will create wealth," he said, "but you - the B20 - know more about creating wealth than government." So will the G20 heed such sage advice?
The early signs suggest the B20 may have energized Australia's efforts but there will be no absence of challenges looking ahead. During the follow-up Trade Ministers meeting, the government committed $1 million (on top of $6 million last week) to a World Bank fund set up to address developing countries' concerns regarding the Trade Facilitation Agreement. But with a July 31 deadline fast approaching and G20 partners India and South Africa leading efforts to oppose implementation over food security concerns, not even the first of the B20's recommendations is guaranteed.
Meanwhile, the International Monetary Fund has just lowered its forecast for global economic growth this year from 3.7 percent to 3.4 percent, dampening the G20's most ambitious goal of lifting GDP by more than 2 percent above the current trajectory for the next five years. For Australia, with the international business community now fully committed to an ambitious blueprint for economic growth, the onus shifts back once again to world leaders to turn such policies into action.