Foreign trade figures of Australia

Foreign Trade in Figures

Australia is very open to international trade, which represented 44% of its GDP in 2020 (World Bank, 2022). It had the 3rd freest economy in the world in 2021, placing its trade freedom as one of the highest worldwide (The Heritage Foundation, 2021). The country mainly exports iron ores slag and ash (36% of total exports), mineral fuels, oils, distillation products (14%), gold and other precious stones, metals, coins and pearls (7.6%), meat and edible meat offal (4.1%). On the other hand, its main imports include machinery (15%), Vehicles other than railway and tramway (12%), Electrical and electronic equipment (12%), Mineral fuels, oils, distillation products (8.1%) and pharmaceutical products with 4,1% of total imports (Trading Economics, 2021). The International Monetary Fund (IMF) is forecasting a rebound of 5.5% in the volume of exports of goods and services of this country in 2022, after a fall of 10.1% in 2020 and 1% in 2021 due to the COVID pandemic, and an increase of 8.3% of its imports, after a fall of 13.4% in 2020 and an increase of 6.8% in 2021 (IMF Country Report No. 21/255, December 2021).

Its main partners are China, Japan, South Korea, India, The USA, Germany, and Thailand (Comtrade, 2022). Structurally, Australian foreign trade is highly dependent on the Chinese economic situation and the country's diplomatic relations with China. As a bloc, the EU is Australia's second largest trading partner. As such, Australia and the European Union launched negotiations for a free trade agreement in mid-2018, but no deal has been signed yet. The country is also negotiating trade agreements with the Gulf Cooperation Council, India, Peru, Indonesia, and Hong Kong. On the 15th of November 2020 Australia has also signed the Regional Comprehensive Economic Partnership (RCEP) with 14 other Indo-Pacific countries. This free trade agreement is the largest trade deal in history, covering 30 per cent of the global economy. It includes the Association of Southeast Asian Nations (ASEAN : Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and ASEAN’s free trade agreement partners (Australia, China, India, Japan, New Zealand and Republic of Korea). The RCEP covers goods, services, investment, economic and technical cooperation. It also creates new rules for electronic commerce, intellectual property, government procurement, competition, and small and medium sized enterprises.

The country's trade balance was characterised by a structural deficit until 2007, but since then the country has been alternating between periods of surplus and deficit. The latest trade data from the Department of Foreign Affairs and Trade and Investment (DFAT) confirmed that the Australian trade sector is highly resilient and performed strongly since the start of the pandemic (Source: DFAT Trade and Investment publications and articles, accessed December 2021). Australia achieved a record high surplus of over A$75 billion in 2020, in terms of the trade balance in goods and services, an increase on the previous two years with A$68 billion in 2019 and A$22 billion in 2018 (Source: DFAT Trade and Investment publications and articles, accessed July 2021). Australia’s two-way trade in goods and services reached almost A$800 billion in 2020. Most of this trade is with Asia. 12 of Australia’s 15 largest trading partners are within the Asia region. These partners accounted for A$516 billion of Australia’s two-way trade, or two-thirds of the total.

In 2020, Australia exported AUD 796,9 billion of goods and services (USD 571,8 billion), a 13.2% decrease compared to the previous year (Austrade, 2021). Seasonally adjusted, as of October 2021, Australia's trade balance was $11,220 millions of October 2021 (DFTA, 2021).