Rudd urges freer trade, climate action

SYDNEY: Australian Prime Minister Kevin Rudd said the world must push for freer trade, lower carbon pollution and boost investment in internet technologies to pull the global economyout of its worst slump since World War II.

"We must now develop a sustainable growth strategy for the long term," Rudd said, according to notes for a speech he gave in Pittsburgh.

Without a new model there may be a global growth gap "as large as A$6 trillion [$7.2 trillion] out of a global economy of A$63 trillion", Ruddsaid.

United States President Barack Obama is hosting Rudd and his counterparts from the Group of 20 nations in Pittsburgh at a summit to discuss measures to ensure a strong recovery from the first global recession since the 1930s.

The global financial crisis was triggered by the collapse of Lehman Brothers about a year ago, forcing financial institutions to post more than US$1.6 trillion ($2.2 trillion) in losses and writedowns.

The debt-driven consumption model of the past "is unlikely to be trusted any more", Rudd said.

This week Rudd joined Italian Prime Minister Silvio Berlusconi in urging the G20 to enforce more regulation. Together they penned a letter to Obama urging him to "bring financial speculation and market manipulation, particularly for raw materials, to the centre of the debate".

Lowering carbon pollution would create jobs and drive economic growth, Rudd said. Carbon trading should start in 2011 in Australia to help reduce greenhouse gases by between 5 per cent and 15 per cent from their 2000 level within 10 years, he said.

"Without global action the economic impact of climate change will be substantial," he said. Greenhouse gases in the atmosphere needed to be stabilised at 450 parts per million or lower and temperature rises needed to be limited to less than 2C, he said.

Australia's proposed carbon pollution reduction legislation must be passed before the United Nations meeting in Copenhagen in December, he said. Australian Upper House lawmakers defeated the legislation on August 13.

Australia, the world's biggest coal exporter, was also committed to researching carbon capture technologies to reduce emissions from the extraction of fuels including coal and natural gas, Rudd said.

International free trade could produce A$750 million of additional global gross domestic product, he said, citing the Peterson Institute.

G20 members agreed in April "to do whatever is necessary to promote global trade". Three months later, Group of Eight leaders committed themselves to a "rapid, ambitious, balanced and comprehensive" conclusion to the WTO talks and set a deadline of 2010 to reach an agreement.

Trade ministers also "affirmed the need" to conclude the Doha Round of talks before the end of 2010, according to India's Commerce Ministry. The Doha round refers to trade liberalisation talks.

- BLOOMBERG