Executive Summary

Since emerging from its relative international isolation during the Franco era, Spain has steadily become an important figure in international affairs and an influential economic partner. Spain is the eighth largest industrialised economy in the Organisation for Economic Cooperation and Development ( OECD) and the fifth largest country in the European Union in terms of population, output and production.

In 2001, the Spanish economy was valued at US$ 582 billion ( some 62 per cent larger than the Australian economy) . For the past five years, the Spanish economy has experienced one of the strongest rates of GDP growth in the European Union. The OECD forecast that Spain s GDP per capita would increase by 2.1 per cent in 2002 and by 3.3 per cent in 2003.

Over the past 10 years, merchandise trade between Australia and Spain increased at an verage rate of just under 14 per cent a year, nearly twice the rate of increase of Australia s trade with the European Union as a whole. In 2002, bilateral merchandise trade was valued at A$ 1.6 billion. Coal continues to be Australia s principal export to Spain, with an annual verage increase of 17.1 per cent over the past ten years. Fast ferries have also been a major Australian export to Spain. Other recent growth areas of particular importance for Australian suppliers include the provision of education services, environmental services, information and communication technology ( ICT) products and services, marine equipment, processed food and wine.

Australia s merchandise trade with Spain in 2002 represented only five per cent of Australia s bilateral trade with the five biggest economies in the European Union. With a population twice the size of Australia s, solid appetite for imports, and unrestricted trade access to other eurozone countries, Spain holds great potential to improve these figures.

Reforms in recent years by the Spanish Government have also created a welcoming environment for foreign investment. New and exciting opportunities for Australian companies have arisen in recent years and a number of Australian companies have successfully established representative offices in Spain. The reasons include low labour and transport costs; the completion of the Single European Market, enabling unrestricted movement of goods and services, capital and labour between member States; and the elimination of exchange rate fluctuations due to the introduction of the Euro.

The Australian Government is committed to assisting Australian companies establish and further develop existing markets for their products and services in Spain. The Australian Embassy in Madrid, in conjunction with Austrade, is active in promoting Australia as commercial partner for Spain. Austrade maintains an office in Madrid, headed by the Trade Commissioner, which provides export assistance to Australian companies.

Doing business in Spain contents