PERTH (miningweekly.com) – Mining giant BHP Billiton has urged policy-makers to support free trade agreements and lift export restrictions on commodities, with CEO Andrew Mackenzie making special note of the US ban on crude oil exports.

“Opponents of open markets argue that they harm working people and their families and say that protectionism is the right response to resource scarcity. But I say free trade doesn’t take jobs; it makes them,” Mackenzie said in Washington this week.

“We need not fear the global trade that makes the growth of China, India and other emerging economies possible. Their continued development will create jobs, raise productivity and lift living standards in the US and beyond.”

He pointed out that a misplaced fear of commodity scarcity has led to growing resource nationalism that hurt both commodity producers and consumers alike.

“The agriculture, mining and oil industries were not prepared for the increase in demand created by China’s development in the last decade. Supply struggled to keep up and commodity prices rose significantly.

“Then markets, trade and technology did their job. New producers came on-stream, supply increased and prices fell back to more sustainable levels. Countries that embraced open markets, found their long-term supply of commodities became more resilient. Those that didn’t lost out,” Mackenzie said.

He told members of the US Chamber of Commerce that supply restrictions were destroying demand, pointing out that, while prices for potash briefly rose when supply was held back by two sales organisations, it resulted in farmers using less potash, which reduced their output. As a result, potash prices fell, meaning lower revenues and higher unit costs for producers, while consumers paid more for food.

Mackenzie noted that a repeal of US policies on the trade of natural resources, particularly that of crude oil exports, would add hundreds of thousands of jobs to the US economy. He added that research showed that prices at the pump would fall.

“Importantly, it would show the world that the US remains committed to economic freedom and the promotion of global growth.”