Economic Diplomacy
The Australian Government's economic diplomacy strategy engages
Australia's international diplomatic assets including our overseas missions,
business networks and aid program to support domestic and international
prosperity. Its four guiding pillars of promoting trade, encouraging
growth, attracting investment and supporting Australian business
recognise the increasing interconnectivity between Australia and the
global economy.
The Department of Foreign Affairs and Trade and Austrade lead a
whole-of-government effort on economic diplomacy through the
negotiation of trade agreements, supporting our business interests
overseas, highlighting the benefits of economic reform in developing
countries, promoting Australia's investment attractiveness and tourism
and building international linkages in agricultural research.
Free Trade Agreements
FTAs secure improvements in market access to help Australian businesses
expand into new markets, boost their international competitive position,
reduce their import costs and foster greater prospects for two-way
investment. Australian producers and consumers also benefit from a
wider range and cheaper imports.
FTAs can cover entire regions with multiple participants or engage
two countries in a partnership. FTA partners enter into legally binding
commitments to liberalise access to each other's markets for goods,
services and investment. FTAs also typically address a range of other
issues such as intellectual property rights, government procurement and
competition policy.
High-quality, comprehensive FTAs play an important role in supporting
global trade liberalisation and are consistent with World Trade
Organization rules. The Australian Government will not enter into any
trade agreement that falls short of the benchmarks set by the WTO, or
that falls short of our own standards of high quality, truly liberalising
agreements that support global trade liberalisation. In 2015, Australia's
ten FTAs in force were with countries who accounted for 67 per cent of
our total trade.
Australia has ten bilateral and regional trade agreements in force:
Trade Negotiations
Australia's FTAs under negotiation include:
- Australia-Gulf Cooperation Council (GCC) FTA
- Australia-Hong Kong Free Trade Agreement
- Australia-India Comprehensive Economic Cooperation Agreement
- Indonesia-Australia Comprehensive Economic Partnership Agreement
- Pacific Alliance Free Trade Agreement
- Peru-Australia Free Trade Agreement
- Regional Comprehensive Economic Partnership
The Trade in Services Agreement (TiSA) is being negotiated by 23
members of the World Trade Organization (WTO), including Australia. If concluded, the TiSA would create new export opportunities for
Australian service suppliers. Australia is one of 46 WTO members
participating in the Environmental Goods Agreement negotiations, which are focused on the removal of tariffs
on a range of environmental technologies. Australia is also negotiating
accession to the WTO Government Procurement Agreement (GPA). This
will put Australian companies on an equal footing to compete in the
US$1.7 trillion government procurement markets of other GPA members.
Australia, the European Council and the European Commission agreed in
November 2015 to start the process toward negotiating a comprehensive
and high quality FTA. Australia-European Union Free Trade Agreement
negotiations are planned to start in late 2017.
The Trans-Pacific Partnership Agreement was signed by Australia and 11
other TPP countries in February 2016. On 30 January 2017, the United
States confirmed that it would not proceed with TPP ratification and
the Agreement cannot enter into force in its current form. Given the
Agreement's many benefits for Australia, work is underway between
Australia and the other TPP countries to assess the options to bring the
TPP into force expeditiously. The Pacific Agreement on Closer Economic
Relations (PACER) Plus was signed by Australia, New Zealand and eight
Pacific island countries in June 2017.
FTA Portal
DFAT's FTA Portal enables businesses to explore the benefits under
Australia's FTAs with China, Japan, South Korea, Malaysia and New
Zealand. Goods exporters and importers will find tariff information,
guidance on rules of origin and import market data that is comprehensive
and easy to use on desktop, tablet or mobile.
The Portal will expand to progressively cover Australia's other FTAs
in the future. For more information visit: www.ftaportal.dfat.gov.au.
Global Value Chains (GVCs)
A 'value chain' is the full range of activities involved in designing,
producing and delivering a good or service. The concept of GVCs is
represented when one country utilises inputs from any other number of
countries around the globe to produce a good or service. Each process
is carried out in a location where skills and materials are available at a
competitive cost and high quality.
In 2011, almost two-thirds of world trade comprised of intermediate
inputs traded within GVCs.
Value chains have become 'global' for a number of reasons, including:
- increasing information and communication technology capabilities;
- changing production costs (e.g. Asia's manufacturing cost advantage);
- lower trade and transport costs and improved international logistics; and
- fewer barriers to trade (e.g. tariff and quota reduction).
The Australian passport is a good example of a GVC in action. Our
passports are assembled in Australia from components sourced from
around the world, as illustrated in the below infographics.
Trade Facilitation
The World Trade Organization (WTO) Agreement on Trade Facilitation
entered into force on 22 February 2017. It is the first global agreement to
enter into force since the WTO was formed more than 20 years ago. For
Australian businesses, exporting goods will become less difficult, take
less time to be cleared by Customs at foreign ports, and should result in
lower costs.
Tourism
The Department of Foreign Affairs and Trade is deepening Australia's
bilateral tourism relationships with growing source markets such as China,
India and Singapore as part of the Australian Government's economic
diplomacy agenda and priorities under Tourism 2020. DFAT engages
closely with multilateral fora, including APEC's Tourism Working Group
and the OECD's Tourism Committee, in pursuit of these priorities.
With Austrade and Tourism Australia, we are working across government
to promote the competitiveness of tourism exports and increase the
sector's contribution to national prosperity.
Trade with Aid Partners
In 2015, Australia's two-way merchandise trade with our ongoing bilateral
development partnership countries was valued at $34.0 billion. Over the
past decade (since 2005) two-way trade has increased by 6.3 per cent per
annum. Australia's exports to these countries have grown by 7.2 per cent
per annum while imports have grown by 5.5 per cent per annum in the
same period.
Market Access for Least Developed Countries
Australia has provided Least Developed Countries full duty-free and
quota-free access to our market since 2003. There has been a notable
increase in LDC exports to Australia, averaging 21.4 per cent per year,
between 2005 when they were worth $165.5 million and 2015 when they
increased to $1.3 billion.
An LDC Services Waiver allows WTO members to grant preferences to
provide LDCs access to their markets with the objective of enhancing
LDC participation in global services trade. Australia's notification of
preferential treatment for LDC service suppliers covers tourism, transport
(maritime, air, rail, road and auxiliary services) and business services
(computer, professional and other business services).