Economic diplomacy brochure

The Australian Government is pursuing an economic diplomacy agenda guided by four key pillars:

Trade

Pursue trade liberalisation through bilateral, regional and global trade agreements that open up new markets for Australian exporters and sustain a strong, rules-based architecture for global trade.

The Government has established an ambitious trade agenda, pushing for greater trade liberalisation—both multilaterally and through free trade agreements.

Growth

Support global growth, including by using Australia's aid program and other measures to promote economic reform and infrastructure, and through regional and global economic cooperation forums.

In the G20, Australia is leading efforts to increase GDP growth across the developed and developing world. Our aid activities will prioritise programs that support economic growth as a path to development.

Investment

Promote investment into Australia and Australian investment internationally.

Australia's prosperity has been built on two centuries of international investment. Attracting productive international investment will create new jobs and new industries to support our future prosperity. Our aid activities help developing countries attract international investment.

Business

Advance the interests of Australian business overseas, the development of a stronger private sector in our region, and promote Australian tourism.

The Government is committed to supporting Australian businesses in Australia and overseas. Our aid activities promote sustainable growth in the private sector in developing countries. We promote Australian tourism in line with the Government's Tourism 2020 strategy.

"The Australian Government is committed to economic diplomacy —to opening up the Australian economy, to empowering private sector growth, to encouraging investment and creating conditions for business partnerships to flourish and trade to flow."

Andrew Robb, Minister for Trade and Investment Speech to US-Australia Dialogue, 2014

"Just like traditional diplomacy promotes peace, economic diplomacy promotes prosperity."

Julie Bishop, Minister for Foreign Affairs, Speech to Australasian Aid and International Development Policy workshop, 2014

Supporting Australia's prosperity

Trade and investment partnerships are, and always have been, central to Australia's prosperity.

We are a nation of traders. Since 1900, trade has never dipped below the equivalent of 25 per cent of Australia's GDP—even as our exports have shifted from gold and wool to iron ore, LNG and education.

In 2013 Australia's trade in goods and services reached a new high, with exports growing 6.1 per cent to $319 billion and two-way trade at $647 billion. Exports to China, Japan and South Korea accounted for more than 50 per cent of all Australian exports. Our top two-way trading partners were China, Japan and the United States, accounting for a combined 40 per cent of our trade. Australia's trade with ASEAN countries, including Indonesia, accounted for 14 per cent of our trade in 2013.

Trade promotes growth and raises incomes. Trade liberalisation has boosted Australia's GDP, and lifted average household income by up to $4,500 per annum.

20 per cent of Australian jobs directly support trade-related activities. Trade gives Australian producers access to a global marketplace with billions of potential customers. In the domestic marketplace, trade encourages competition—reducing prices and increasing variety for Australian consumers and business.

Foreign investment supports the growth of current Australian businesses—like the mining sector—and helps build the industries of the future. In the agriculture sector foreign investment will help Australian farms grow to meet regional demand for safe, high quality produce.

Tourism directly employs more than half a million Australians and is currently our largest services export industry—delivering $26 billion in income. Education is our largest services export. Australia has the fifth highest number of foreign students in tertiary education in the world.

Supporting global prosperity

Greater regional and global prosperity is strongly in Australia's interest. It reduces poverty, supports stability, and creates new markets for our exports.

In the G20, Australia is leading a global growth agenda aimed at boosting the prosperity of developed and developing countries.

Our aid program supports prosperity through better infrastructure, support for economic reform and financial inclusion, a focus on women's economic empowerment, and the broader enablers of economic development like education and skills development, and health.

Our trade liberalisation efforts—including negotiation of free trade agreements—boost two-way trade with our major trading partners.

Our exports of iron ore, coal and LNG provide the inputs that drive economic growth in China, Japan, South Korea and elsewhere. New investment in these sectors will further expand production.

Infographic: Economic diplomacy snapshots. See text alternative link following this image.

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Last Updated: 18 September 2014

Case study: free trade agreements

Our network of free trade agreements supports global and regional trade liberalisation by removing tariffs and other barriers to cross-border trade. Agreements with ASEAN, Chile, Malaysia, New Zealand, Singapore, Thailand and the United States provide Australian producers with a competitive advantage in these markets, which between them cover 28 per cent of Australia's total trade. Recently negotiated agreements with South Korea—our third‑largest export market—and Japan—our second-largest two-way trade partner—will help Australian exporters remain competitive while delivering savings to Australian consumers on high-value imports, including cars and consumer electronics. Current negotiations include China, the Trans-Pacific Partnership Agreement (TPP) and the Regional Comprehensive Economic Partnership. China is our largest export destination, and in 2012-13 close to 34 per cent of Australia's total trade occurred in the TPP region.

Case study: promoting tourism and investment with the USA and India

The Australian Government promotes Australian investment and tourism in established and emerging markets. In the United States, G'Day USA, a joint initiative of government and the private sector, aims to grow Australian tourism, trade and investment, public policy and research collaboration. It is supported by the Department of Foreign Affairs and Trade, Austrade, Tourism Australia, state and territory governments, Qantas and other Australian businesses. In India, Australia's High Commission in New Delhi, and Consulates-General in Chennai and Mumbai, are working to promote Australia as an investment destination, and with Tourism Australia and state tourism offices to promote Australia as a preferred leisure destination for India's growing middle class. Tourism Australia's India 2020 Strategic Plan sets a foundation for the future when long-haul leisure travel by middle-class Indians becomes common, including a focus on cricket tourism for the Australia and New Zealand-hosted 2015 Cricket World Cup.

Case study: agricultural trade and Indonesian food security

The Australian Government is supporting growth in agricultural trade with Indonesia while promoting Australia's ability to contribute to Indonesia's food security agenda. Programs run from the Jakarta Embassy are positioning Australia as a food supplier of choice in Indonesia. Australia's aid programs are delivering substantial benefits to Indonesian farmers and their communities by working with agribusinesses to improve farmer practices and strengthen access to agricultural markets. The Australian Centre for International Agricultural Research is helping Indonesia's agriculture sector improve productivity and food quality. Additionally in the red meat and cattle sector, the Indonesia-Australia Partnership for Food Security—a joint government and industry initiative—is supporting increased investment and agricultural cooperation between Australia and our largest neighbour.

Case study: private sector assistance and financial inclusion in the Pacific

Through the aid program, the Australian Government is committed to supporting private sector growth and improving access to financial services in our region. Around 80 per cent of Pacific Islanders do not have access to basic financial services, like a bank account. Thanks to Australian support, over 500,000 people, including over 200,000 women, now have access to mobile money in Papua New Guinea, Vanuatu, Samoa and Fiji. Australian Government support for the Pacific Private Sector Development Initiative, alongside the Asian Development Bank and the New Zealand Government, has reformed the Companies Acts in Samoa, Solomon Islands and Tonga. This has led to a doubling of the number of new companies being incorporated. In Solomon Islands, registering a business now takes one day, and has resulted in a jump of 38 places in the World Bank's ease of starting a business indicator