Jeffrey Wilson (00:10): Welcome to DBrief, the podcast where we explain policy to industry and industry to policymakers. I'm Jeff Wilson, and today I'm hosting on behalf of Louise McGrath, who you normally hear in the host's chair. The reason for that is that today Louise herself is our guest, dialling in from Washington, DC, where she's attending the 2026 B20 Summit – effectively the business parallel to the G20 summit that's held annually by world leaders.

It goes without saying this is an extraordinarily interesting time for the B20 to be meeting in Washington. On the home front, the US has just had its midterm elections. Globally, we continue to grapple with the impacts of the conflict in the Middle East, new developments in artificial intelligence are making headlines, and there are unfolding changes in the global trade system – all of this coming before next week's COP Climate Summit in Turkey.

The interesting thing about the B20 is that it's not just the Americans. While this year's B20 is hosted by the US Chamber of Commerce, it attracts business leaders from all 20 countries, providing a really rare opportunity for a genuinely global view on economic and technological policy developments. So it's a real privilege for DBrief to hear from Louise on the ground. This is Australian Industry Group on the Road. Louise, thanks for braving the horrors of our time zone difference today.

Louise McGrath (01:41): Thanks, Jeff.

Jeffrey Wilson (01:43): I'll start with the obvious question. What is the B20, what are you doing there, and what is Australian Industry Group doing there?

Louise McGrath (01:53): As you say, Jeff, the B20 is the business interlocutor into the G20, which is government 20 – the 20 largest economies of the world. Often we hear about the G7 and the B7, but this is the G20, and it was created after the global financial crisis. Normally the G7 – or I think it was probably still the G8 then, because it still included Russia – would deal with these things as the adults in the room. But Kevin Rudd was our Prime Minister at the time and he convinced them that the G8 was too big for them, and that they actually needed to include more of us. And so it became the G20, which included Australia as one of the 20 largest countries in the world.

Every year the business community comes together in various task forces – innovation, trade, usually a people one, often a technology one – and we create recommendations that are then presented to the G20, or the governments. This year the host is the US, and it's the first time in its history that the US has been host.

What's really interesting, given that we are after the midterms, is how little the Trump administration has been involved in the B20. We've had one relatively junior speaker, and that's it. When we were in India, we had Modi and the Trade Minister – actually the most entertaining panel I've ever seen, because the Indian Trade Minister had various trade ministers, including Australia's and China's, and basically mocked them on the stage. But they all put up with it because India's big enough. In Indonesia, we had Jokowi. So every country does it a little bit differently. There are no set rules, but this one's very interesting. We've got our recommendations, and they will be presented to the administration when the G20 is held in Miami in December.

So why is Australian Industry Group here? We've been here right from the start. The first meeting was basically 20 people around a table. It was Heather Ridout, our CEO at the time, and Innes went along carrying the bags. Now Innes is here and I'm here carrying the bags.

Louise McGrath (04:16): It was very small to begin with, and over the years it's grown bigger and bigger as more people realised the power of it. This year there are over 4,000 delegates, obviously from the 20 countries but also others. There's a huge delegation from Kazakhstan – for some reason. Well, not some reason: critical minerals. Also Uzbekistan, and right across. I really love coming to it because it's an opportunity to come together with our peers and coordinate. On Monday we released a joint statement with Keidanren, the Japanese industry association, and a few others, asking the governments of Canada, the US and Mexico to move a bit more quickly on their review of USMCA, the North American trade agreement. It's also an opportunity to just meet colleagues and hear what's going on.

I've just come from a very interesting conversation with my colleague in Argentina. When we last spoke, I think in Indonesia, he was about to get his new president, Javier Milei, who is quite an unconventional character, a bit of a purist. He was terrified – "this crazy person, what's he going to do? He doesn't believe in the central bank." So I said to him today, "Well, how's it going?" And he said, "It's a very interesting experiment." He said Milei does exactly what he says he's going to do, which for a politician is unusual. He's reduced export taxes, he's banned printing more money, he's increased exports of gas and petrol – which is a great year to do it – and exports of lithium, another great year to do it. I said, "This sounds fantastic." "Yes, yes, and for the first time we don't have a deficit." I asked, "So have you reduced inflation?" And he said, "Asking about inflation in Argentina is like saying good morning. This is going to sound crazy to you, but it's only increasing by one per cent a month." So that's good news in Argentina.

It's great to hear from colleagues. I heard from the Brits this evening about their troubles having to get event insurance that included death of a monarch. There are all sorts of different things everyone's confronting around the world, and it makes your own problems a bit smaller.

Jeffrey Wilson (06:43): It does, Louise. I came from a much less storied event just before we recorded this, which was an RBA liaison briefing. They said inflation in Australia was bad, but one per cent a month is horrible – I should have told them that. There's an old saying that where you stand depends on where you sit, and you're sitting on the ground in DC at the moment. Could you give us a sense of the mood and feeling, not just amongst the Americans but amongst the whole polyglot that's been assembled in DC this week?

Louise McGrath (06:54): Yeah.

Louise McGrath (07:12): We're recording this almost a week after the midterms, which brought a significant change in the makeup of Congress and the Senate. They're calling it the blue tsunami – I've even seen posters of the Hokusai wave with the names of Democrats. Unfortunately the car was moving too quickly, otherwise I would have taken a photo. I think it's quite interesting from a trade point of view: is this good news? Will this change anything? The Democrats have not traditionally been very pro-trade. I understand certain high-profile people, such as Elizabeth Warren and others, have come out saying tariffs are bad, but to be honest, I don't think they're really trade purists. They're really just anti-Trump. Whatever Trump believes in, they don't. If Trump suddenly said "I hate tariffs", they'd suddenly love tariffs.

So I'm not sure the trade situation is going to change. It's also sort of irrelevant, because Trump should have gone through Congress for all these tariffs and he didn't – Congress is actually the body with the power, and he's using executive orders. One thing that is really interesting, though, is the impact of data centres on the recent election. That's given everyone a bit of pause, because without data centres there's a whole market for critical minerals at play, and it leads into AI. So everyone's wondering: is this the end of data centres? There were 41 anti-data-centre proposals as part of the elections, and 40 got up. So the social licence is not there at the moment. But I'm sure a lot of the people protesting data centres are using social media and their phones, not perhaps thinking about the role of data centres in those communications. We obviously need them.

One of the speakers today made the point that perhaps it's not that people don't want it or don't believe in it, but that it feels uncontrollable – that it's moving so quickly. So perhaps if we slowed down and brought people along with us, that would make a difference. It just feels out of control at the moment. So there's a definite pause.

Jeffrey Wilson (09:06): Sure.

Jeffrey Wilson (09:11): Okay.

Louise McGrath (09:35): There's a lot of curiosity about what it means. It's probably raised more questions than answers.

Jeffrey Wilson (09:42): Might move on to trade then. I know you've just said Trump's still the president and he's still the tariff man – that's not going to change. But it's really interesting to think about what this blue wave might mean for how US policy sits within the US system. Trump's got two more years. You can tell us about it, but the B20 statement this year was strongly pro-growth and strongly free enterprise, which most people would take as implicitly pro-trade too, although if it's in DC you might not have used that word in the press release. You've got this push from parts of the business world, and Trump hasn't been amenable to it, but the foundations are shifting underneath. Not next year, but thinking ahead – what's your take on where US policy, the business community and its leadership are going after all of this?

Louise McGrath (10:41): The business community is filled with multinationals and is still very interested in trade – it wants predictability and reliability, and that hasn't changed. This morning we had a breakfast hosted by the BDI, our counterpart in Germany, and they invited what they call their like-minded partners, which was pretty expansive – it included Egypt, which is not a G20 country. The discussion was kicked off with Carney's middle power speech. I find it interesting that the EU, or even Germany, considers itself a middle power. Germany is, I think, the third largest economy in the world, so it's hardly a middle power – but they focus so much on the SMEs, the medium-sized companies. Anyway, I really liked Carney's speech, and of course Canada was there. Canada's very excited right now. They've got the leader they want, they're all united in their fight against Trump, and they're really on the rise.

I was really interested in the discussion about the CPTPP – the UK has joined and the Europeans are interested in joining. It's becoming the de facto WTO. The question was raised to the room: is the WTO dead? Is it worth trying to reform? Or is it sort of brain dead but still basically functioning? This was a room full of trade purists, so none of us admitted it was dead, because we've spent the last twenty-odd years of our careers focused on it. But is it worth investing in reforming, because without China and without the US it doesn't work?

Jeffrey Wilson (12:26): [laughs] Yeah, yeah.

Louise McGrath (12:38): It's still limping on. But the fact that everyone is so interested in the CPTPP – which frankly is not a high-profile free trade agreement in Australia, though it has a good base of rules – makes me wonder, with all the digital rules we're introducing, whether US companies, if the US were a member of the CPTPP, could use it to counteract those regulations. I'm not sure. But for Europe to think this is the benchmark that we should all line up and join, and that it's going to replace the WTO – I think that's interesting. I was thinking this morning, Jeff, about that report we did a couple of years ago, with our prediction of what trade would look like, where it became trading groups and plurilateral trade. And there we are. This is the reality.

Jeffrey Wilson (13:42): It's a shock to me, Louise. I cut my teeth early in my policy career on the CPTPP, and I remember initial meetings where Europeans said, "No way, this will kill the WTO. We're WTO loyalists, we couldn't possibly join." That was about ten years ago now. So to hear Europe grabbing a US design that they rejected, and running with it, is fantastic.

It's a good segue to the question of partners. You mentioned one event was the Quad. The Quad, for listeners, was originally a defence and security cooperation group between the US, Australia, Japan and India. There was a showcase for the Quad at the B20 this week, with a lot of different content that was not defence or security or maritime exercises – critical minerals, critical technologies, I'm guessing AI was in the mix, investment agreements between them. What came out of that?

Louise McGrath (14:52): At a big event like the B20 there are a lot of meetings in the margins, so this wasn't an official B20 event. It was a meeting hosted by the US Chamber, Australian Industry Group, the Confederation of Indian Industry and Keidanren, the Japanese industry association. It's Chatham House rules, so I can't say who said what, but I can talk about the content. It started off with some government representatives and then, as you say, different panels.

Because we haven't had a leaders' meeting for some time, I think people would wonder whether the Quad is really active. It seems it is – various ministers have met, with three ministerial meetings this year. At one point these things get out of control, and I think there were fifteen different working groups. They said, "If we're going to be serious, let's get it down to three or four" – critical minerals, technology, economic security. That's how we focused on those groups. Innes moderated the critical minerals one, which is a conundrum, really. Everyone wants critical minerals. In an earlier session at the B20, we learned that the US Defense Force relies totally on China for all its batteries. Think of all the things batteries go into, from drones to binoculars.

But it's very difficult for a liberal, pluralistic society to mandate who's going to process critical minerals. One of the questions raised at the end was whether the challenge is environment and regulation – is this more than price? One of the participants said, "We're not going to compromise on environmental conditions, and this is a dirty process, so it's going to be expensive if we do it in a clean way. China has different priorities." Jeff, we've been in meetings for years now, wringing our hands about how we can unlock the value of critical minerals and build another supply chain so we're not so totally reliant on China – and yet nothing changes.

Louise McGrath (17:17): The other interesting thing about the Quad, other than that we're very good at identifying problems and not solutions, is that they identified that they need industry to be involved. There will probably be an industry session in our region sometime next year, which will be a really good way for interested companies to get involved. One of our Members, who I was sitting next to during the Quad meeting, identified two opportunities for himself. There are a lot of opportunities for Australian companies in this, because it's niche work, and that's exactly where we'd like to play.

Jeffrey Wilson (17:58): We'll take a break and be back in a second to talk about a couple more things, particularly Europe and Australia.

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Jeffrey Wilson (19:28): Welcome back to DBrief, where I'm talking to Louise McGrath, who calls in live from the ground in DC, talking about the 2026 B20 Summit currently underway. Louise, just before the break we were talking about critical minerals, and this is really central to Australia's relationship with the European Union at the moment. You've had the opportunity to meet with a lot of European colleagues at the B20, and that's particularly pertinent with the Australia–EU FTA about to come into being through the last stages of the process. For probably the first time in any FTA in the world, critical minerals have been – not the sole thing, but in some senses the centrepiece for why we want to do this deal, and what's helped get it over the line in Europe to some degree too. What does the Australia–Europe story look like, and what are you hearing from EU colleagues?

Louise McGrath (20:20): It's a bit complex. There's a bit of debate at the moment in Australia about signing on to the EU FTA. Usually our FTAs have bipartisan support, so this is a little unusual. Before they get to us, they made it very clear – before we think of ourselves as too important – that they've got Indonesia and then India. I don't think those would be very substantial FTAs, though, which makes them less controversial. Then in the new year we'll be up for the vote in their parliament. If we miss that window, there will be an election in France and likely quite substantial change – I don't know whether further left or further right, but either way protectionist – which would make it very difficult. So yes, they're very keen on critical minerals for it to go ahead. They keep saying, "Why does anyone care about beef? We hardly import any beef." And we say, "That's the point."

In conversations I also learned about something new, which I haven't had time to really investigate before this recording, called Made in Europe. When I first heard about it I thought it was like Make in India, where we're encouraging manufacturing – everyone's got one. But it's actually quite an incorrect name. It's a government procurement process where they have to buy from Europe.

Jeffrey Wilson (21:19): That's the point of the FTA from our perspective – we want you to buy it all. Please.

Jeffrey Wilson (21:37): Everyone's got one. Everyone has one.

Louise McGrath (21:48): It's been quite controversial, and I thought, we always have very good government procurement rules in our FTAs, so I'm wondering whether this is compliant with our FTA. They've signed up to the WTO Government Procurement Agreement, so I'm not sure it's compliant. It just shows there are a lot of moving parts in these agreements in every country. The objection from some in Australia is the climate conditions that are put in. I asked the president of the EU business association, from Poland, about CBAM, and he said it's taking so long to implement, it's getting harder and harder, and it's getting very expensive. Germany's in a lot of trouble because they refused to use coal, so they went onto gas, which all came from Russia, and now they're in a whole lot of pain. Of course they rely on Qatar for all their gas, and with the war in Iran they're really in trouble.

Here's an interesting tip, and I know we might talk about AI: Poland and Germany are providing subsidies for data centre investment, which was extraordinary to me.

Jeffrey Wilson (23:14): Listeners at home, my eyes just widened dramatically.

Louise McGrath (23:16): Yeah. I thought, why are you paying the richest countries? Anyway, don't get me started on Europe and subsidies. One of the reasons is that they don't have clean energy. When Germany decided to get rid of its coal plants, it also completely destroyed its nuclear plants, so it only has gas now, and it's not particularly clean and is quite expensive. That's why they're having to provide these subsidies.

Jeffrey Wilson (23:20): [indistinct]

Louise McGrath (23:44): France has nuclear power, which is essentially clean power, and has data centres coming all over the place. So Europe is one – except when it isn't. They aren't as committed to environmental conditions like deforestation rules and CBAM as they were ten to fifteen years ago. With disaffected youth and protests expanding in France and Italy, there are a lot of social problems they're dealing with, and those sorts of environmental measures are perhaps seen as a luxury they can no longer afford.

Jeffrey Wilson (24:25): Continuing the bilateral talk, I have to ask you about Australia and the US, because you're an Australian in the US – that's a mandatory question. It's fair to say Australia has had a pretty rocky relationship with the US over the second Trump presidency, with its ups and downs, though not nearly as rocky as many other partners, particularly on the trade front. Our trade issues have hopefully been minor in the scheme of what Canada has had to go through. But we've had the midterm change. I know you've been around a lot of US agencies this week on the sidetracks to the meetings. What are the Americans thinking about us, and where do we fit into how they're dealing with these issues?

Louise McGrath (25:15): It's very interesting. We're very polite, and I try not to mention the tariffs and things like that and go hard – I'm trying to be very diplomatic, which seems wasted, because the Americans are in no way constrained. They're very clear on what we're doing wrong, such as gas reservation, social media rules, and making platforms pay for media. There's a whole range of things they would prefer we didn't do. The OECD tax reporting, apparently we're also doing to upset people. They make the point that it's not a big change, but it's death by a thousand cuts – a lot of little bits of regulatory change that make things a bit uncertain.

But then after 20 or 30 minutes of all this, they say, "But of course, in your region, you're still the best. Where else would we go? And such-and-such a company has just announced a big investment." So there's a little bit of performance. But it is interesting to hear others' perspectives. We're here all the time providing constructive criticism and suggestions, and it's very interesting to see what those on the outside think. The other thing was streaming content rules, having to have Australian content on platforms.

Jeffrey Wilson (26:19): Mm.

Louise McGrath (26:39): I don't know that any Australian would object to a lot of these things – the social media rules, the news bargaining – so I don't think the Australian government is going to sway. And as we said, there's investment anyway. But it isn't something we should take for granted. What's the saying? It takes a hundred years to build a reputation and a minute to lose it. We should be very mindful. I opened with Argentina – there was a point when Australia and Argentina were equals. So things can slip away, and there are all sorts of ways our economic future could be uncertain. It's always a good reminder for us, and for our government, that being consistent, being transparent and –

Jeffrey Wilson (27:17): And we were ahead. We were ahead.

Louise McGrath (27:38): – providing that clarity for business investment is always very important.

Jeffrey Wilson (27:43): That's probably the last one we'll finish on. After three days of intense meetings, I'm sure you'll need a bit of a breather. What's the one idea, not just for Australia but for Australian industry, that you want to bring home when you fly back in the next couple of days? What's the takeaway Australian industry needs from this complex, volatile mix of big arguments about big questions going on in DC at the moment?

Louise McGrath (28:14): Well, I've still got two more days, Jeff. I'm recording it just because of timing, but there are still more meetings.

Jeffrey Wilson (28:19): We've peaked early. There's going to be a great meeting tomorrow that's not going to make the cut. Oh dear.

Louise McGrath (28:27): That's all right. I think for Australia it's always good to be reminded where we are in the world. As I said, we're well regarded, we're trusted, we have a great reputation, and there are a lot of things going for us. But I think we've got to get out of our own way. The gas reservation is a good example, and it's interesting that the Americans raised it. For a lot of our Members, the fact that we aren't the most competitive, when having great cheap energy should be a given, seems crazy. From a trade point of view, I understand we need to adhere to contracts, but from an industry point of view we should have access to a lot of cheap energy. That will be important for our competitiveness, so we'll see what happens there.

The other thing is AI. It didn't come up as much as I thought it would – it's come up a bit, but not in a consistent way. It's an interesting bubble. Over history there's been the tulip bubble, the rail bubble, the dot-com bubble. This one's interesting because it's software and hardware, and it all comes down to critical minerals. What Australia can do to improve our processing and our engagement in the world on critical minerals will hold us in good stead. The number of conversations I've had about copper and lithium – and I know nothing about either of those topics – and the fact that I can hold my own just as an Australian is a good sign, I guess. I think the reputation we have holds us in good stead. Our relationship with China will be interesting: the conversation around decoupling from China certainly exceeded the conversation around decoupling from the US. China in our supply chains is a fantastic way for us to be internationally competitive right now, but I wonder how that will go in the future.

Jeffrey Wilson (30:37): Well, thanks Louise, and thanks everybody for listening to this episode of DBrief on the Road. I really hope this has given you a unique window into the world of international and American policy that we wouldn't necessarily get to this level of detail on in Australia, and shown how it's going to have practical impacts for Australian industry. In the next episode we'll continue the DBrief on the Road theme, where Australian Industry Group will be represented at next week's COP Climate Summit in Turkey, so you'll hear from us shortly in a similar format. If you found this podcast via a link on our website, please remember you can subscribe on whatever podcast platform you currently use. If you've got any input or comments you'd like to share, we're on LinkedIn, or you can email us at industry.policy@australianindustrygroup.com.au. My name's Jeff Wilson and I've been speaking with Louise McGrath from Washington, DC. Thanks very much.