Leslie Massey
Australia is a relatively open, trade-exposed economy, with international trade and investment being critical to its economic growth and prosperity. The Australian government has committed to bringing together government, industry, unions, and community representatives to serve as a key consultation forum to progress its trade policy agenda. Australia has a diverse economy and is a global leader in sports and innovation, with a highly skilled and multilingual workforce. The country has strong trade links with the United States, its largest economic partner, with two-way trade valued at US$77 billion and a US$1.6 trillion investment relationship. Australia also has free trade agreements (FTAs) with various countries, including New Zealand, Singapore, India, and ASEAN nations, which reduce or eliminate barriers to trade in goods and services.
| Characteristics | Values |
|---|---|
| Trade agreements | Australia-New Zealand (ANZCERTA or CER), ASEAN-Australia-New Zealand (AANZFTA), Australia-India Economic Cooperation and Trade Agreement (ECTA), Australia-United States Free Trade Agreement (AUSFTA) |
| Trade partners | United States, New Zealand, Brunei, Burma, Malaysia, the Philippines, Singapore, Vietnam, Thailand, India |
| Trade value | US$77 billion in two-way trade with the US, US$51.3 billion in goods trade with the US, US$34.6 billion in goods exports to the US, US$16.7 billion in goods imports from the US, US$1.6 trillion in investment relationship with the US |
| Trade organisations | World Trade Organization (WTO), the G20, Asia-Pacific Economic Cooperation (APEC), Organisation for Economic Cooperation and Development (OECD) |
| Trade priorities | Maximising trade and economic opportunities for Indigenous Australians and First Nations businesses, accelerating growth in the tourism sector, promoting education internationally |
| Trade support | Austrade provides trade and investment services to businesses, connects Australian businesses to the world, helps exporters, attracts foreign investors, stimulates the visitor economy, gathers insights and data for policymakers |
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What You'll Learn
Australia's free trade agreements (FTAs)
Australia has a relatively open, trade-exposed economy. This means that changes in other countries' demand for Australian goods and services can have a significant impact on the economy. Australia's free trade agreements (FTAs) are international treaties that reduce or eliminate certain barriers to investment and trade in goods and services. The Australian government, industry associations, and business groups play a crucial role in assisting businesses in understanding and utilising these FTAs.
The United States and Australia have a close trade relationship underpinned by the U.S.-Australia FTA. In 2024, U.S. goods trade with Australia totalled an estimated $51.3 billion, with U.S. goods exports to Australia at $34.6 billion and imports from Australia at $16.7 billion. The U.S.-Australia FTA includes committees on goods, agriculture, sanitary and phytosanitary matters, and financial services, as well as subcommittees on labour and the environment.
Australia also has FTAs with three North Asian countries: China, South Korea, and Japan. These FTAs have contributed to business confidence and positively impacted business activity, stimulating export growth and attracting new goods, services, and investment to the Australian economy. They are particularly beneficial for merchandise trade and are viewed favourably by internationally engaged Australian businesses.
The Australian Trade and Investment Commission (Austrade) plays a vital role in connecting Australian businesses to the world and promoting trade and investment opportunities. Austrade representatives deliver trade and investment services to businesses, accelerate the growth of exporters, attract foreign investors, and stimulate the visitor economy.
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The Trade 2040 Taskforce
Australia has a relatively open, trade-exposed economy. This means that changes in other countries' demand for Australian goods and services can have a significant impact on the economy. For instance, an increase in global demand for Australian exports, if not matched by a corresponding increase in supply, will result in higher prices for those exports. This price ratio between exports and imports is known as the terms of trade.
The task force's objectives include putting people and businesses at the heart of Australia's trade policy, implementation, and delivery. It provides a platform for members to exchange perspectives and offer advice to the government on trade and investment policy, promotion, and priorities. This includes Australia's involvement in trade negotiations and international economic cooperation forums.
The task force's work is set against the backdrop of a complex global environment, including Australia's transition to a net-zero economy. It also contributes to important initiatives, such as the report "Invested: Australia's Southeast Asia Economic Strategy to 2040," which outlines the country's economic strategy for the region.
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Australia's economic relationship with the United States
Australia and the United States have a strong and multifaceted economic relationship that goes back many years. The US has been the single largest destination of Australian investment for decades. More than 28% of all outbound Australian investment goes to the US, valued at $486 billion, which is equivalent to more than one-third of Australia's GDP in 2016.
US-Australian bilateral trade and investment have flourished since 1793, when the American trading ship Hope delivered 7,500 gallons of rum to Sydney. The Australia-US Free Trade Agreement (AUSFTA) that came into force in 2005 ushered in a new era, with US exports to Australia more than doubling. As of 2024, US goods trade with Australia was valued at $51.3 billion, with US goods exports to Australia at $34.6 billion and US goods imports from Australia at $16.7 billion.
The US has been the largest source of foreign investment into Australia for over 30 years. In 2016, exports to Australia generated 264,000 US jobs, and Australia is among the top 10 export destinations for the US in more than 15 states. Australian companies employ approximately 150,000 people in the US, with around 19,000 in California and Texas alone.
The Australian government, through Austrade, works to strengthen the country's trade and investment relationships and promote economic growth. Austrade helps Australian exporters, investors, and buyers, as well as international investors, connect with global markets and supports the domestic tourism sector.
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Australia's economic relationship with the Indo-Pacific region
Australia has a relatively open, trade-exposed economy. This means that changes in other countries' demand for Australian goods and services can significantly impact its economy. Australia has plentiful natural resources, including the second-largest accessible reserves of iron ore, the fifth-largest reserves of coal, and significant gas reserves. Commodities have long made up a sizeable share of its exports.
The Australian Trade and Investment Commission (Austrade) helps grow Australia's prosperity by delivering trade and investment services to businesses, accelerating growth in its tourism sector, and promoting Australian education to the world. Austrade representatives deliver these services to businesses worldwide, connecting Australian businesses to the world and vice versa.
In terms of trade interests, Australia has increasingly looked to markets in Asia, particularly in the Indo-Pacific region, and less to its traditional Western allies. This shift has occurred as China has risen and become more assertive, creating a strategic rivalry with the US and its regional partners. Australia has found it challenging to insulate its commercial interests from this regional geopolitical tension.
The United States and Australia have a close and cooperative trade relationship, underpinned by the U.S.-Australia Free Trade Agreement (FTA). In 2024, U.S. goods trade with Australia totalled an estimated $51.3 billion, with exports to Australia at $34.6 billion and imports from Australia at $16.7 billion. The U.S. goods trade surplus with Australia was $17.9 billion in 2024, a slight increase from 2023.
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The Australian Trade and Investment Commission (Austrade)
Austrade supports Australian exporters, international investors and buyers, international education providers, students, and the domestic tourism sector. It provides online toolkits, opportunities, a network of overseas posts, advice, insights, and contacts to exporters of all sizes.
Austrade connects overseas importers to Australian suppliers and promotes high-quality investment in Australia. It also strengthens Australian tourism and the visitor economy by promoting Australia's education and tourism sectors internationally. Austrade representatives help Australian businesses source goods and services from Australia.
Another priority of Austrade is maximising trade and economic opportunities for Indigenous Australians and First Nations businesses. Austrade offers exciting careers in Australia and overseas, allowing individuals to contribute to Australia's success.
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Frequently asked questions
Austrade representatives deliver trade and investment services to businesses, connecting Australian businesses to the world and vice versa. They also help exporters, attract foreign investors, and stimulate the visitor economy.
A Free Trade Agreement is an international treaty between two or more economies that reduces or eliminates certain barriers to trade in goods and services, as well as investment. Australia has FTAs with New Zealand, ASEAN, and India.
The AUSFTA came into effect in 2005 and has led to a 138% increase in two-way trade between the two countries. Over 97% of Australia's non-agricultural exports to the US are now duty-free, and Australian companies have access to the federal government procurement market in the US.
International trade and investment are critical to the Australian economy, creating jobs and prosperity. Australia is a trade-exposed economy, meaning changes in other countries' demand for Australian goods and services can significantly impact the economy.
Australia is a member of international organisations such as the World Trade Organization (WTO), the G20, Asia-Pacific Economic Cooperation (APEC), and the Organisation for Economic Cooperation and Development (OECD). Australia also has a close trade relationship with the United States, its largest economic partner.
