International Trade in Australia

News Related to International Trade in Australia

Business outline for Australia

Main Industry Sectors

The tertiary sector occupies a dominant position in the Australian economy (more than three-fourths of the GDP), but the agricultural and mining sectors are the most important for its exports. Australia is a vast agricultural country and one of the world's main exporters of wool, meat, wheat and cotton. The country is overflowing with mineral and energy raw materials, the export of which ensures it substantial revenues. Australia is among the top 10 producers and exporters of most mineral ores. It has the world's greatest reserves of numerous strategic resources such as uranium, of which it has 40% of the world's proven reserves.

Traditionally Australia is a finished goods importer. Its industrialization is fairly recent, a fact which explains the small scale of its manufacturing sector, which only employs 10% of the active population. The manufacturing industry is built up around the food industry (approximately a fifth of the workforce), machinery and equipment (around 20%), metal processing and metal goods (nearly 20%) and the chemical-petrochemical industry (slightly more than 10%).

Economic Overview

Australia is the world's thirteenth largest economic power. After a slowing down due to global recession, in 2010 the Australian economy has been growing again, with an estimated growth rate of 3 % of the GDP. This good economic performance owes to the government's fiscal policy of incentives, by the increase in household consumption and especially by the continuous Chinese demand which helps exports.

The Australian government's priorities are to improve the country's competitiveness, namely with regards to the export competition of Asian countries and to deal with the challenges of its aging population and its environment which is vulnerable to climatic problems (droughts).

Australia is a prosperous country and its per capita GDP is amongst the highest in the world. Despite the recent increase in unemployment rate due to the global economic crisis, it remains consistently low, around 5%.

FDI in Figures

In terms of foreign direct investment (FDI), Australia is ranked 13th in the world but 3rd in the Asia-Oceania zone, behind Hong-Kong and China (since 2005). Traditionally, Australia is an investment destination. Its economic liberalism, its stability and judicial system transparency, combined with strong economic growth of more than 15 years, make up for the narrowness of its market and its geographical isolation, and make it a desirable destination. The effects of the 2008-2009 financial crisis have not harmed its capabilities and Australia remains a valued destination to a number of investors.

FDI Government Measures

Foreign companies get assistance, especially for productive investment, R&D, professional training and job creation. For many years, the amount of administrative formalities for setting up foreign companies has been reduced.

Country Strong Points

The customary Australian dynamism, its economic robustness, its strong growth, stable and juridically reassuring business environment and position as a practical access platform for certain markets, like New Zealand and the Pacific islands, make this country a choice target for establishment.

Country Weak Points

Reduced competition in some sectors can limit returns on scale. Lack of investment in transport and telecommunication infrastructures sometimes slows down growth in some sectors.

Foreign Trade Overview

Australia's external trade is characterized by a structural trade deficit. The increase in exports has not compensated for the high imports which are stimulated by a strong Australian dollar. In terms of continuous growth, and despite healthy exports, the deterioration of the current account balance and of the structural deficit are still the Australian economy's weak points.
The country is becoming more and more dependent on Asian economies and the price of raw materials. Australian foreign trade is not  well developed, a fact which reflects the country's relatively weak globalization integration. Australia must improve its infrastructures in order to redress the bottlenecks that have been restricting exports for a long time, so as to allow it to better integrate in global trade. The country's main trade partners are Southeast Asia, the United States and the European Union.