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Australia has long been a significant trading nation, and in 1948 ranked sixth as a world exporter. The past four decades have seen that position eroded somewhat as successive governments have struggled with a basic adjustment in the direction and composition of Australia’s position in international trade and, in the past two decades, falling world commodity prices. The first battle was to overcome the loss of its traditional trading links. The success of that re-orientation can be seen in the direction of Australian trade. In 1957, when Australia signed its first trade agreement with Japan, the countries now comprising the European Community were taking 51 per cent of Australia’s export trade and the countries of East Asia 21.2 per cent. In 1993-94, the position is reversed, with East Asia taking 58 per cent and Europe 13.3 per cent.

In the past decade the Australian Government has had considerable success in targeting its exports more directly to its region, and especially to the dynamic East Asian economies comprising the South East Asian Nations (ASEAN), China, Hong Kong, Japan, the Republic of Korea and Taiwan.


Australia has also tackled the more basic problem of the composition of its export trade. Exporting industries have moved from a commodity-based export culture to one more geared to manufacturing and services, which now comprise 46 per cent of total export earnings.

Exports of manufactures have grown at the rate of 16 per cent a year over the decade to 1993-94, with the strongest growth achieved in elaborately transformed manufactures such as telecommunications and automatic data processing equipment. There has also been strong growth in assembled motor vehicles, which have increased at a trend rate of almost 50 per cent over the decade.

The services industry has also been a strong export performer, led by the tourism industry. It recorded real growth higher than 12 per cent a year over the decade to 1993-94, when it earned $7.7 billion representing 42 per cent of total export income in services. The information technology and telecommunications industry is also a major contributor, with exports running at more than $2 billion in 1993. A recent survey by the Australian Information Industry Association estimates that they could rise to more than $8 billion by 2000. Strong export growth in services has significantly lowered the deficit in the national services account. Running as high as 1.6 per cent of GDP in the 1970s, it had dropped to 0.3 per cent by 1993-94 and a continuation of present trends would bring it into surplus by 1995-96.


Australia has worked hard in international trade organisations to achieve free and open international trade. At the same time it has taken decisive action to reduce its own trade barriers. A progressive program of tariff reform will see general levels of assistance reduced by 1996 to five per cent, with special provisions retained only for the motor vehicle, textile, clothing and footwear industries. Nor does Australia rely extensively on non-tariff barriers to shore up its trading position. As a medium- sized country with relatively small economic influence it relies primarily on the multilateral framework of trade, and has concentrated in the past decade on two aspects of trade policy.

The Uruguay Round: these lengthy negotiations provided an opportunity for Australia, and other countries with an interest in extending the General Agreement on Tariffs and Trade (GATT) to agricultural matters, to try to break down the increasing protectionism which had crept into international trade through devices like the common agriculture policy of the European Union (EU). Australia conceived the 14-member Cairns Group as a body of like-minded agricultural exporters who would act as a third force between the United States and Europe to wean the industrial countries, and particularly the EU, away from their reliance on subsidies. By making agricultural trade the price for its support of other items on the Uruguay Round agenda, the Group was able to argue successfully for a comprehensive overhaul of the world trade agenda. The Cairns Group will stay in place to ensure full commitment to the agreements of the Round.

The completion of the Uruguay Round, and the formation of the World Trade Organisation to administer its many agreements to free up international agricultural trade and reform services and intellectual property, provides the opportunity for a new era in international trade. Australia has combined that opportunity with its initiatives to work towards a fully free trade system in the Asia-Pacific region in the 21st century.

Asia Pacific Economic Co-Operation: Six years after its launching by the then- Australian Prime Minister, Bob Hawke, APEC is listed by Senator Evans as "the most visible and significant progress made by Australian diplomacy." The initial participation of 12 countries - the United States, Japan, Canada, the republic of Korea, the six countries of ASEAN, Australia and New Zealand - has now extended to 18 with the addition of China, Hong Kong, Taiwan, Mexico, Papua New Guinea and Chile. At its meeting at Bogor, Indonesia, in November 1994, members agreed to adopt the long-term goal of free and open trade and investment in Asia-Pacific, and to announce their commitment to having industrialised economies achieve that goal no later than the year 2010 and developing economies no later than 2020. It was also decided to expand and accelerate the trade facilitation programs identified by an informal APEC group chaired by Australia and involving the facilitation of trade and investment flows through reforms in areas such as technical standards, investment guidelines, customs harmonisation and non-tariff barriers.

This document has been prepared by Australia's International Public Affairs branch of the Department of Foreign Affairs and Trade. The help received from Australian government departments, associated organisations and other authorities is gratefully acknowledged. Information is current to April 1995. Money values are in Australian currency, weights and measures in Metric.