Southern Cone Common Market of South America initiatives.
The APEC Individual Action Plans set out how each economy will move to achieve the region’s free trade goals. Australia is actively exploring new trade opportunities created by this development.
Multilateral trade strategies
Australia seeks also to advance trade liberalisation on a global basis with other members of the World Trade Organisation (WTO). The WTO is an effective rules-based system providing stability, predictability and transparency in international commerce. As the only forum that brings together the world’s major trading nations, the WTO provides the most effective means by which broad-based trade reform can be achieved.
The WTO’s third Ministerial Meeting in Seattle in December 1999 failed to reach agreement on an agenda for a further round of trade negotiations. Australia will continue to support efforts to launch a new round of negotiations covering all sectors. In the interim, Australia will work to ensure that progress is made in the mandated negotiations on agriculture and services.
As one of the world’s most efficient agricultural producers, Australia has a particularly keen interest in ensuring that trade in agricultural goods is liberalised along with trade in other areas.
In order to promote the liberalisation of agriculture, Australia founded the Cairns Group of Fair Trading Agricultural Exporters in 1986. The Cairns Group has proven to be an effective force for liberalisation in a sector that continues to be subject to disproportionately high levels of protection.
Trade promotion
The Australian Trade Commission (Austrade) is Australia’s official export facilitation agency. Austrade targets its assistance to small and medium-sized businesses, including those in rural and regional Australia, helping to reduce the time, costs and risks involved in entering and expanding overseas markets. During the 1998-1999 financial year Austrade helped 12 000 Australian companies achieve more than A$6 billion in export sales.
Sectoral trade strategies
Market access facilitation teams have been established to pursue improved market access for automotive; textile, clothing and footwear; information industries and processed foods and agriculture sectors. Efforts combine use of bilateral contacts with industry and government decision-makers, involvement in relevant regional and multilateral dialogue and parallel efforts to promote the Australian product and develop market interest.
Lowering barriers to trade
Australia wants open, fair and competitive trade between nations. It is a right of government to apply tariffs and other measures, for example, excise duties and sales taxes at the border, provided they do not discriminate between one country and another or make any special considerations for domestic producers. Due largely to previous rounds of multilateral trade negotiations, as well as regional and bilateral efforts, international tariff barriers have been reduced significantly. However, there remain a range of measures that can lead to distortions in the international trading system.
The widening trade reform agenda takes in other issues such as:
? unjustified quarantine restrictions
? barriers to investment
? customs valuation methods
? conflict between national and international standards
? import licensing
? quota restrictions
? export subsidies.
As well as working to make international trade freer and fairer through the World Trade Organisation (WTO), Australia places a high importance on its involvement in the Asia Pacific Economic Cooperation (APEC) group and on bilateral negotiations with its trading partners.
Australia has carried forward the free trade and investment agenda agreed by APEC leaders at Bogor in 1994. Along with other APEC members, it has tabled annually an Individual Action Plan (IAP), which sets out how it will move to achieve the region’s free trade goals.
A high-level, interdepartmental task force on bilateral market development, set up in 1996 to target and coordinate Australian resources more effectively in key markets, is also shaping Australia’s trading future. Australia has regular meetings with many of its trading partners in the form of joint economic and trade commissions.
Australia as an international buyer and seller
Australia has a high standard of living and a growing economy. It buys billions of dollars worth of goods and services from our international trading partners.
Many of the most expensive imports are used to maintain and develop Australia’s advanced information and physical transport industries.
Australia’s three largest import items in 1999 were cars ($6.8 billion; 7% of total merchandise imports), crude petroleum ($4.7 billion; 5% of total merchandise imports) and computers ($4.6 billion; 5% of total merchandise imports).
Computers and telecommunications equipment alone account for a tenth of the total value of imports.
Aircraft, trucks, heavy equipment and machinery account for almost another tenth of the value of imports.
The great bulk of imports are for producers rather than consumers.
Top 10 merchandise imports in 1999
Value ($ million) % of total imports
Passenger motor vehicles 6787 7
Crude petroleum 4682 5
Computers 4618 5
Telecommunications equipment 4510 4
Aircraft and parts 2934 3
Medicaments 2552 3
Motor vehicles for goods transport 2400 2
Computer parts 2168 2
Motor vehicle parts 2152 2
Non-monetary gold 2005 2
Source: ABS data on DFAT STARS database
Australia has a strong base in natural resources and efficient agricultural and mining industries. This is reflected in the merchandise it sells to the world.
Fuels and minerals generate about a third of merchandise exports, with coal, iron ore, aluminium and petroleum products near the top of the list.
Australia remains a major international supplier of agricultural commodities such as wheat, meat and wool and exports of other agrifood products such as wine, dairy products and canola are growing rapidly.
Top 10 merchandise exports in 1999
Coal $8.4 billion
Non-monetary gold $4.8 billion
Iron ore $3.6 billion
Aluminium $3.3 billion
Wheat $3.1 billion
Meat $3.0 billion
Aluminium ores $2.8 billion
Wool $2.5 billion
Crude petroleum $2.3 billion
Refined petroleum $1.8 billion
Source: ABS data on DFAT STARS database
Reforms within the Australian economy have helped make it more flexible and responsive to change.
During the recent East Asian economic crisis, for example, exporters diversified into new markets in North America and Europe, as well as in the Middle East and South America.
Export growth to East Asia recovered considerably in the second half of 1999 and the export outlook for 2000 is positive.
Seven Asian markets were among Australia’s top 10 export markets in 1999. They are Japan, Korea, Taiwan, China, Singapore, Hong Kong and Indonesia. Japan remains Australia’s largest single export market, buying almost one-fifth of total merchandise exports. Among non-Asian markets, the most significant for Australian exporters are the United States, New Zealand and the United Kingdom. In total, these 10 markets accounted for 60 per cent of Australia’s exports in 1999.
Australia’s top 10 export markets in 1999
% of total exports
Japan 17
USA 8
NZ 7
Korea 6
Taiwan 4
China 4
Singapore 5
UK 4
Hong Kong 3
Indonesia 2
Source: ABS data on DFAT STARS database
Australia’s export base has diversified over the past 15 years, thanks largely to new international business opportunities and greater competitiveness of Australian businesses. As a stable democracy with a well-educated work force, a tradition of innovation and a strong and expanding information infrastructure, Australia has developing strengths in services, advanced manufactures and intellectual property.
Tourism is one of Australia’s largest and fastest-growing industries. Generating more than $16 billion in foreign exchange earnings a year, inbound tourism contributes three per cent of Australia’s gross domestic product. Tourism now accounts for 14 per cent of Australia’s total export earnings and is Australia’s leading services export item.
The Australian Tourist Commission offers information to intending visitors in several European and Asian languages.
In the past decade, education has become one of Australia’s major export earners, generating over $3 billion in 1999. Third in the English-speaking world behind the US and Britain, the number of overseas students in the higher education sector in Australia is increasing at a far greater rate than its larger competitors. Australian Education International provides useful information for intending students.
Music, film, computer software and pharmaceuticals are among Australia’s fastest growing export industries.
Selected trading partners – 1999
($billion)
Source: ABS data on DFAT STARS database
Foreign Direct Investment (FDI)
Australia recognises that FDI, both inwards and outwards, delivers tangible benefits to Australia and contributes to our economy. Inward FDI assists our economic development, including contributing to improved export competitiveness and export flows. Outward FDI has enabled Australian businesses to generate growth and build networks in global markets.
Foreign investment in Australia in 1998 had reached $571 billion, of which $252 billion came from members of APEC. Australian investment abroad totalled $249 billion, with $132 billion invested in APEC countries.
Invest Australia, the national investment agency, is tasked by the federal government with promoting Australia as an investment location. The agency works with Australian States and Territories and through Australian embassies and the international network of Austrade, to increase investment in Australia.
From its 14 offices around the world Invest Australia promotes Australia as an attractive investment location, facilitates major projects, and provides services to companies wanting to establish or invest in operations in Australia.
Services include:
? identifying and promoting investment opportunities in Australia
? providing strategic advice
? coordinating and connecting investors with the right government contacts
? assisting with the establishment of regional headquarters
? streamlining the immigration process
? finding the right joint partner or strategic ally
? providing information on relevant foreign investment regulations
? assisting with grants to undertake pre-feasibility and feasibility studies for major investments;
? for qualifying large investors, a Major Projects Facilitation service to assist companies through government approvals quickly and efficiently.
MERCHANDISE AUSTRALIA BUYS IN INTERNATIONAL MARKETS
Source: ABS data on DFAT STARS database
Bibliography
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