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Free trade: A global challenge, an individual imperative

Andrew Mackenzie, Chief Executive Officer
German-Australian Chamber of Industry and Commerce Asia-Pacific Regional Conference, Perth, 4 November 2017.

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President Steinmeier, Prime Minister Turnbull, Prime Minister Alka-tiri, and visiting foreign dignitaries. Premier McGowan, Minister Cormann, other Government Ministers and parliamentarians, Dr Lienhard and ladies and gentlemen.

It is always good to be in Western Australia - home of our Pilbara iron ore operations, nickel business and half of our Petroleum division. We employ more than 16,000 people here and are proud of our many contributions to this great state. Our success has been, and will continue to be, made possible by our strong relations with the WA government and with the people and local communities they represent.

I am pleased that so many people from so many different backgrounds have come together at this conference. Though many of us are already connected by business, government and culture, we can deepen these relations over the weekend and make new ones.

As a research fellow in Aachen and Jülich from 2000 to 2002 I built many friendships and a love of Germany that remain strong today.

The diplomatic relations between Australia and Germany span decades and have led to partnerships on trade, investment and innovation. We share common values on open trade, beliefs in fairness, inclusion and cultural diversity, and a commitment to multilateral solutions to the world’s biggest challenges and opportunities.

Three years ago, the Australia-Germany Advisory Group, under my predecessor as President of the German-Australian Chamber of Commerce, Lucy Turnbull, developed a plan for more trade and investment between our countries and for greater cooperation in science and education. All designed to get the world and our countries on a higher growth path for the sake of those who feel left behind and of young people, and for the environment.

This plan is now affected by increased concerns about globalisation.

The America First policy of the Trump administration, the results of many European votes, and arguably the outcome of the NZ election, appear in conflict with the liberal multilateral consensus.

Although Kanzler Merkel won the most votes in Germany’s recent election, the increase in AfD’s share in a country that has invested so heavily in social infrastructure so its people benefit from a global connected economy confirms that these concerns about globalisation are widespread.

Globalisation is seen as the reason why many people have been left behind. And everyone here today is touched by this. For me the decisions by the United States to withdraw from the TPP and Paris are a big disappointment, as I campaigned hard for both of them.

No global company can afford to ignore the challenge of those who feel left behind.

I applaud the actions by the Australian and German governments, and Germany’s leadership in the margins of this year’s G20, to establish stronger bilateral frameworks and partnerships that allow business and governments to work and grow together.

I have three suggestions for business to get behind the Advisory Group’s agenda that Lucy Turnbull started.

First, business must work with governments to secure even greater bilateral and multilateral cooperation.

For example, the Australian-EU Free Trade Agreement will provide benefits to both. In my role as President of the German-Australian Chamber of Commerce I have promoted the use of German technology to keep Australian mining at the forefront of innovation.

In my recent conversations with the Mexican Foreign Affairs Minister I learnt that Mexico, where we are a major investor, now searches for ways (along with many others, including Australia) to resuscitate the TPP. I strongly endorse this and I encourage businesses here today to do the same.

But diplomacy and trade deals are only one part. We require an even more skilled workforce, equipped to compete and be more productive in the future.

This brings me to my second suggestion. Business has to invest more, alongside government, in research and development, in training and education, to make sure we have a workforce and society proficient in science, technology, engineering and maths (or STEM).

We can learn from Germany’s commitment to lifelong technical and vocational education through Technische Hochschulen, Berfusschulen, the dual apprenticeship system and vocational training on the job that I have experienced first hand.

At BHP we continue to invest in significant STEM initiatives. Our Foundation has a focus on joint projects with government and communities on education equity because we believe in the power of education to drive progress, and to lift people out of poverty and away from armed conflicts.

We also have commercial reasons for this investment. We want tomorrow’s workers to have the skills to tackle tomorrow’s challenges and opportunities. A talent pool attuned to the future.

Third, business and multinational companies must make a stronger case to the publics of Australia and Germany that we are a force for good in society and the world.

That we invest to create jobs (in the case of BHP, well-paid, rural jobs) and to renew our economies so that we share the benefits of globalisation with our communities and younger people.

So that voters, then politicians, are drawn to towards us to increase our power to do good.

For too long as businesses we have complained and blamed others for the opposition to globalisation. I believe now is the time for us to act, to defend with conviction our principles, to champion the values of multilateralism and of progress. So business and political leaders in Europe and the Asia-Pacific region have to promote fairness, free trade and globalisation, and the broader benefits that business and multinational companies bring to the World. And invest in research and development, education and training.

Germany and Australia start from a good place. Germany - a strong, influential and admired nation - has the opportunity to lead Europe and the Northern Hemisphere, while Australia continues to play a critical role in the Asia-Pacific and the Southern Hemisphere.

As the world pivots towards the Asia-Pacific to secure its economic future, we must make sure both our nations’ influence is felt.

China now enjoys new influence, in part from the size and growth of its economy.

In the long term, however, less will be possible in Asia-Pacific if the best of the China model is not combined, through our influence, with best practices from the liberal multilateral consensus.

The security and prosperity of our individual businesses, and our individual nations and populations, rely on our ability to work freely, innovatively and cooperatively with each other.

Our social licence depends on it. The future global economy requires it.

We will all benefit from a better educated and more skilled workforce, from more advances in science and engineering, from increased capital investment. Coupled to and enhanced by freer trade, open borders and global cooperation, and a greater sense of fairness in the world. All of which are at the heart of our democracies and our business communities.

Thank you.