Lyla Lindsey
Australia is the world's 13th biggest economy, with a GDP of almost $1.5 trillion. The country is the 24th largest exporter and importer globally, with a positive trade balance of $28.7 billion. Australia's top exports include coal briquettes, copper ore, and iron ore, while refined petroleum and cars are among its top imports. China is Australia's largest trading partner, with Japan, the United States, South Korea, and India also among its top five partners for exports and imports. Australia has free trade agreements with several countries, including New Zealand, the United States, Japan, and China, which are designed to lower trade barriers such as tariffs and quotas. These agreements have had varying economic impacts, with some sectors benefiting more than others.
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What You'll Learn
Australia's free trade agreements
Australia has been pursuing bilateral free trade agreements (FTAs) since the early 2000s, and currently has agreements with ten countries: New Zealand, Singapore, the US, Thailand, Chile, the ASEAN nations, Malaysia, South Korea, Japan, and China. Australia also signed an FTA with Peru in 2017, which is yet to be ratified by parliament.
A free trade agreement is an international treaty between two or more economies that reduces or eliminates certain barriers to investment and trade in goods and services. The purpose of these agreements is to lower barriers to trade such as tariffs or quotas between countries, boosting competition in the goods and services markets.
Australia's North Asian FTAs have high utilisation rates for merchandise trade. These agreements have positively impacted Australian business confidence and activity, stimulated export growth, and attracted new goods, services, and investment to the economy. However, critics of FTAs point out that they can negatively impact some sectors, especially import-competing ones, as was the case with Australia's car manufacturing industry.
The Australian government, industry associations, and business groups assist businesses in understanding and utilising the country's FTAs. Trade intermediaries also play a crucial role in helping businesses take advantage of FTAs effectively.
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Top exports
Australia's economy is heavily reliant on its exports, which contribute significantly to its national income and global trade standing. The country is known for its abundant natural resources and agricultural products, which make up a large part of its exports. In 2024, Australia's exports represented 18.2% of its overall Gross Domestic Product, valued at $1.898 trillion in Purchasing Power Parity US dollars.
Australia's top exports include mineral fuels, including oil, inorganic chemicals, gems and precious metals, meat, and cereals. In 2024, mineral fuels, including oil, were the largest export category, accounting for US$75.5 billion (down from US$113.4 billion in 2023). Gems and precious metals were the second-largest category, valued at US$16.6 billion, led by gold exports. Meat was the third-largest category, with export sales increasing by 17.3% since 2023.
Australia is a significant exporter of coal, including metallurgical coal (used in steelmaking) and thermal coal (used in power generation). Coal exports contribute substantially to the country's export earnings and supply a large portion of Asia's energy needs. Liquefied Natural Gas (LNG) is another major export, benefiting from the global transition to lower-carbon energy sources. Australia's LNG exports have increased its market share and contribute heavily to the country's export income.
Other notable exports include gold, used in electronics and jewellery, agricultural products such as wheat, and aluminium ores. The export of education services also represents a substantial part of Australia's economy, with international students bringing in billions of dollars in revenue before the pandemic.
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Top imports
Australia has ten free trade agreements (FTAs) in place with New Zealand, Singapore, the US, Thailand, Chile, the ASEAN nations, Malaysia, South Korea, Japan, and China. It has also signed an eleventh with Peru, which is yet to be ratified by parliament.
Australia's biggest import spend is on tourism, followed by cars and petrol, telecommunications equipment (including computers and phones), and international freight transport.
The country's free trade agreement with Japan, for example, lowered the price of Japanese cars for Australian consumers in 2015. However, critics point out that cheaper imported cars destroyed Australia's car manufacturing industry because it couldn't produce cars as cheaply as other countries.
Australia is also a signatory to the Trans-Pacific Partnership (TPP), a multi-nation deal that was designed to exclude China to balance its huge economic gravitational pull.
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Australia's biggest trade partners
Australia's trade landscape is dynamic and complex, with a mix of established and emerging partnerships. The country's top trading partners vary based on the type of trade and the calendar year being considered.
In 2024, Australia's top 5 partner countries for merchandise trade and services imports were:
Thailand, with a trade value of $24.1 billion, a $1.2 billion (5.4%) increase from the previous year.
The United States of America was Australia's largest services imports partner in 2024, accounting for 25.2% of total service imports. Key imports from the US include pharmaceuticals, machinery, and vehicles.
China is Australia's largest import and export partner. It provides a wide range of goods to Australia, including electronics, machinery, and textiles. Australia's key exports to China include iron ore, coal, and natural gas, which fuel China's industrial growth.
Japan is another major destination for Australian exports, receiving coal, natural gas, and beef, and vehicles, machinery, and electronics from Australia.
Australia also has significant trading relationships with other countries, such as South Korea, India, Singapore, and Thailand. The country is seeking to diversify its trade portfolio by exploring emerging markets like Vietnam, Indonesia, and Brazil, which offer opportunities for expanding exports of minerals, agricultural products, and education services.
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Australia's unusual exports
Australia is the world's 13th biggest economy in terms of GDP, with a value of almost $1.5 trillion. The country is the 24th largest exporter and importer globally, with a positive trade balance of $28.7 billion. Australia has ten free trade agreements in place with various countries, including New Zealand, the US, and China.
One of Australia's more unusual exports is camels, which are supplied to Saudi Arabia. The country is also the world's leading exporter of coal briquettes, with a 40.3% share of an annual export market worth $142 billion. India, Japan, and China are the top importers of coal briquettes from Australia, although coal is mined in every state.
Another of Australia's notable exports is cars. The country's free trade agreement with Japan, for example, lowered the price of Japanese cars for Australian consumers when the Japanese passed on some savings after tariff cuts. However, this also negatively impacted Australia's car manufacturing industry, as it could not compete with the cheaper imported cars.
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Frequently asked questions
Australia's main exports include coal briquettes, copper ore, iron ore, and camels.
Refined petroleum is Australia's most imported product. Other imports include cars, telecommunications equipment, and international freight transport.
Free trade agreements (FTAs) are meant to lower trade barriers such as tariffs and quotas, boosting competition in the goods and services markets. Australia's FTA with Japan, for example, lowered the price of Japanese cars for Australian consumers.
Australia's top trading partners include China, Japan, the United States, South Korea, and India.
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