Australian businesses have responded to the government’s trade diversification program by looking to expand their export markets, says the Trade Minister in a media release.
Australian exporters are looking to target new markets, including the US, the UK, India and Indonesia – where Australia already has, or is working towards, free trade agreements, according to Australia’s 2021 International Business Survey published yesterday.
Minister for Trade, Tourism and Investment Dan Tehan said the Morrison Government was working to support trade diversification by pursuing trade liberalisation and investing $72.7 million in the Agribusiness Expansion Initiative.
The Minister said that under the Agribusiness Expansion Initiative, the government has already supported more than 5000 agribusinesses in their efforts to expand and diversify their exports. Our Australian exporters are dynamic and innovative operators, and their work is supporting domestic jobs and economic growth, he added.
The government’s International Freight Assistance Mechanism (IFAM) helped maintain the air link between Australian exporters and nearly 60 international destinations, ensuring producers could continue to reach their international customers in the face of COVID-19 disruptions.
According to another media release from Austrade, Australia is a highly globalised economy. Trade accounts for over 40% of our nominal GDP. They point out that 12 of Australia’s 15 largest trading partners are in the Asia region. These partners account for two-thirds of Australia’s total exports. This reflects Australia’s geographical good fortune and our free trade agreements with key Asian economies.
China remained Australia’s largest trading partner in 2020, accounting for around 31% of total two-way trade. Japan and Korea continue to be important trade partners, representing around 13% of total trade.
Many exporters have diversified their markets. For example, the ASEAN region now accounts for almost 13% of total trade. Australia also maintains strong trading links with traditional partners. The EU and the UK account for 13% of total trade. The US accounts for another 9%.
Australia’s resources and energy exports have increased by a factor of five in 20 years. Exports of these two commodities increased by 3% to over A$290 billion in the year to June 2020 (Source: Department of Industry, Science, Energy and Resources, Resources and Energy Quarterly, June 2021).
In a separate report, DHL’s annual Export Barometer revealed that 69% of businesses expect export orders to increase next year.
Reflecting on the previous 12 months, more businesses this year (45%, up 17% from 2020) reported growth in export orders. In terms of revenue, a third recorded a slight or significant increase, with large businesses and businesses selling to consumers more likely to report growth.
While COVID-19 has obviously impacted export revenue, a good recovery is expected in 2022.
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