why does australia trade with other countries
Trade liberalisation and economic reform have been at the heart of Australian Government policy for decades. Until the 1960s, Britain and the United States were Australia's main trading partners. Today the emphasis of Australia's trade has shifted to Asia, with four out of five of Australia's top trading partners located there. China, Japan, the United States and the Republic of Korea are now Australia's largest trading partners. Australia has a very open market with minimal restrictions on imports of goods and services. This has increased productivity, stimulated growth and made the economy more flexible and dynamic. Australia has developed a competitive edge in a range of goods and services, from high-technology products such as medical and scientific equipment through to high-quality wine and processed food. Major services exports include education and tourism, and professional and financial services. Services by Australian companies operating overseas provide a major contribution to Australia's economy. Australia continues to push ahead with trade liberalisationвunilaterally, bilaterally and multilaterally. This will strengthen international economic collaboration, reduce the risks facing the global economy, and bolster growth. Australia plays an active role in the WTO, APEC, the G20 and other trade related forums. Australia has also negotiated bilateral and regional trade agreements with a wide range of countries to strengthen trade and investment flows. Australia has ten FTAs currently in force, with: New Zealand, Singapore, Thailand, US, Chile, the Association of South East Asian Nations (ASEAN) (with New Zealand), Malaysia, Korea, Japan and China.
The countries with whom Australia has these FTAs account for 67 per cent of Australia's total two-way trade. Australia and 11 other countries also successfully concluded negotiations for the Trans-Pacific Partnership (TPP) Agreement in late 2015 and signed the TPP in Auckland on 4 February 2016. Australia is engaged in six FTA negotiationsвtwo bilateral FTA negotiations with India and Indonesia, and four plurilateral FTA negotiations with the Regional Comprehensive Economic Partnership Agreement, the Gulf Cooperation Council, the Pacific Trade and Economic Agreement (PACER Plus), and the Trade in Services Agreement. With abundant resources, skilled professionals and cutting-edge technology, Australia is a leader in the global mining industry and is among the largest producers of bauxite, iron and zinc ore, nickel and gold. Australia is also a major supplier of energy, including coal, natural gas and uranium. In 2015, the mining sector accounted for approximately 9 per cent of the Australian economy (based on industry value added at basic prices) and minerals and fuels accounted for 42 per cent of Australia's exports. The sector is expanding, driven by a huge demand for raw materials from the rapidly growing economies of Asia. The scale of Australia's resources industry has helped the country become a world leader in the development and manufacture of mining equipment, technology and services. Australian firms are competitive across the supply chain, including in exploration, engineering, processing, environmental management, mine safety, training, and research and development.
Total value of exports: A$316. 6 billion
Iron ores and concentrates (49,060) Coal (37,031) Education-related travel services (18,801) Natural gas (16,456) Personal travel (excluding education) (15,943) Total value of imports: A$352. 7 billion Personal travel services (excluding education) (26,688) Passenger motor vehicles (20,365) Refined petroleum (18,436) Telecom equipment parts (11,676) Freight services (10,156) Services also account for a significant amount of trade with other countries. In 2016, services made up 21. 6% of Australiaвs total exports. When the value that Australian services add to goods exports is also taken into account, services represent around 40% of our export earnings. Australia is a world-class provider of a range of services, such as professional services, education and tourism, financial services, energy and mining-related services, environmental services and financial technology (FinTech). These are Australia's priority sectors for improving market access in global services trade reform efforts. What are Australiaвs main services exports? In 2016, Australia's five-largest services exports were: Education-related travel services в $22. 0 billion Recreational travel services в $17. 4 billion Professional services в $4. 8 billion Business travel services в $4. 2 billion Financial services в $3. 5 billion. The figures above show that remain vitally important to our economy and international services trade. How do open services markets benefit Australia? Encouraging more trade in services through open markets and non-discriminatory treatment can lead to higher employment levels, improved incomes and better standards of living.
Opening up some service sectors to competition gives Australian consumers access to a wider range of services and more national and international expertise. The increased competition that free trade brings also encourages local service providers to become more innovative and efficient in the way they deliver their services. This has benefits for other areas of the Australian economy that rely on the services sector. In 2015, global services exports were valued at US$4. 8 trillion, nearly a quarter of the worldвs total exports. Efficient service sectors supported by good domestic regulation are major drivers of economic growth, especially in developing countries. Services already make significant contributions to the GDP of many developing countries, with services trade в particularly tourism в an important income source. Lower wages also give developing countries an advantage in more labour-intensive service sectors such as shipping and construction. How does DFAT promote improved services trade? Australia, through DFAT, takes a leading role in services negotiations at the and. Australia is currently involved in the, a services-only agreement led by Australia, the European Union and the United States. We also support services exports by negotiating. The DFAT publication contains detailed statistics on the composition and direction of Australia's services trade and how this compares to global trends. It is updated twice a year for calendar and financial years.
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