When Australia assumes the leadership of the G20 this Sunday, the world will be watching to see if the 2014 Brisbane leaders' summit will set the stage for genuine progress on global economic challenges or whether we will just be keeping the seat warm for the Turkish presidency in 2015, a bit like the Russians kept the seat warm for ours. If we are serious about grasping the opportunity, the best thing we can do is to harness the G20 to advance multilateralism in the trade arena.
In recent years multilateral momentum has stalled. This has been caused in the most part by the derailment of the Doha Development Round negotiations from 2008, the focus of important meetings in Bali next week. The repeated failure of the 159 nations of the WTO to come to an agreement on Doha to date has meant that the rules of international trade have remained largely in stasis over the past five years.
Meanwhile, most of the focus has shifted to huge preferential trade agreements like the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). And since the 2013 election the Abbott Government has concentrated almost exclusively on bilateral deals with Korea, China and Japan.
The G20 is one of Australia's most prominent avenues for global economic influence and for this reason, we cannot let it fade into irrelevance.
While the multilateral rules have been bogged down, the nature of international trade has evolved. Global value chains (GVCs) have become the norm in international business. Products are rarely manufactured wholly in one nation any more. Each individual part is built in a country with comparative advantage, making it much harder to measure or understand trade between nations. This challenge is compounded by new technology like 3D printing and more.
A modernised multilateral framework is essential. The world's largest 20 economies around the G20 table have a role to play in building momentum. This is the point well-made in a series of Lowy Institute papers by the highly-respected former Treasury official Mike Callaghan and his Lowy colleague Mark Thirlwell, who echoes calls for a "WTO 2.0".
While the G20 forum played a major role in navigating the world economy out of the Global Financial Crisis, the most recent summit will be remembered more for divisive debate on the Syrian crisis rather than economic progress. At the beginning of the GFC the G20 helped ensure the world did not lurch immediately down the path of global protectionism.
Yet despite reaffirming the five-year-old commitment against protectionist trade policies at the St Petersburg summit, a report by the Centre for Economic Policy Research found that G20 member states have implemented a total of 1527 'beggar-thy-neighbour' measures since August 2008.
With these sorts of deficiencies, commentators from around the world have started to question the G20's role as the peak international economic forum. This loss of confidence is particularly bad news for Australia. The G20 is one of Australia's most prominent avenues for global economic influence and for this reason, we cannot afford for the G20 to fade into irrelevance.
What better way to prove ongoing relevance and what better way to establish a reputation as more than an effective crisis manager than to assume the mantle of multilateral trade leadership under Australia's presidency? As Callaghan and Thirlwell argue, we should see the 2014 G20 Summit as an opportunity to simultaneously breathe new life into both the multilateral trading system and the world's largest economic forum.
The key objectives must be to salvage whatever is possible from the Doha negotiations, to set up a modern focus for future multilateral trade progress at the WTO level, and to properly integrate trade issues into the heart of the G20 Framework to ensure that it does not slip of the summit's agenda into the future.
Unfortunately, the portents are not good. We have heard precious little from Prime Minister Tony Abbott about his vision for the G20 beyond a paltry political statement on Monday. And while the Treasurer talked about tax administration and infrastructure he's spoken very little about the challenges of international trade.
Julie Bishop did make a fleeting mention of multilateralism in her remarks to the CHOGM Foreign Ministers' forum on the G20. But Bishop's hope that the current preponderance of bilateral and regional free trade agreements would "effectively end up with a multilateral outcome" is hardly the kind of leadership necessary to build the momentum required for G20 and WTO progress.
It would be easy for the Australian G20 agenda setters to focus on easy wins and areas of general agreement among the member states, but little would be achieved by this approach. As a middle power with a big trade account, we have the most to gain from a more ambitious trade focus.
The onus is on Australia to take up the real challenges facing world trade in the G20 meetings in 2014. This is how we ensure the G20 is a central player in reviving multilateralism as the key organising principle of world trade, en route to a more prosperous post-crisis global economy.