Global ties

Australia is a trading nation, with exports and imports of goods and services making up 42 per cent of our gross domestic product in 2018–19. With 14 free trade agreements in place, approximately 70 per cent of Australian trade enjoys liberalised access to overseas markets. Twelve of our 15 largest markets are in Asia and Oceania, generating a trade value of around A$577 billion in 2018–19. Trade in services has grown at 6.3 per cent per year for the past two decades, helping to steadily broaden our export mix beyond resources and agriculture.

Growing 8.5 per cent per year since 2011, foreign direct investment (FDI) inflows help power our capital-intensive industries. In 2019, the mining sector accounted for 35.3 per cent of the total stock of overseas investment in Australia, worth A$360 billion. This FDI directly contributes to Australia’s minerals and energy exports, which reached around A$280 billion in 2018–19. Australia’s thriving manufacturing sector attracted A$131 billion of overseas investment in 2018–19.

Charts from the Benchmark Report

The Australia Benchmark Report provides rich data demonstrating why there is no better place than Australia to do business. The report examines five key reasons for investing in Australia – robust economy, dynamic industries, innovation & skills, global ties and strong foundations – and compares Australia’s credentials with other countries.

Charts can be downloaded and saved as images for use in reports and presentations (when using please reference www.austrade.gov.au)

Australia’s top 15 export markets, 2018-19
1.  Australia’s export links to booming Asian markets
Australia’s integration with Asia’s dynamic economies is driving wealth creation. Goods and services exports totalled A$470 billion in 2018–19. China – Australia’s most-valuable export destination – received approximately one-third of total exports. A further 30 per cent of total exports collectively went to Japan, Korea, the US and India. Twelve of Australia’s top 15 export markets are located in Asia, with exports worth A$357 billion in 2018–19. This represents more than three-quarters of Australia’s current export earnings.
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Australia’s exports and imports of goods and services
2.  A trading nation
In 2018–19, Australia’s two-way trade in goods and services totalled A$892 billion, making up approximately 46 per cent of nominal GDP. Twelve of Australia’s 15 largest markets are in Asia and Oceania, with a total trade value of around A$577 billion. This accounts for almost two-thirds of Australia’s total two-way trade. It also shows how integrated Australia’s economy is with our Asian neighbours.
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Australia’s trade in goods and services, 2018-19
3.  Australian exports in high demand
Commodities play a vital role in Australia’s export market, with iron ore, coal and liquefied natural gas the key products. The combined export value of these top three commodities (A$197 billion) accounted for 42 per cent of the nation’s goods exports in 2018–19. Australian services are a fast-growing export earner too, with a total value of A$97 billion in 2018–19. Their success demonstrates the global pull of Australia’s world-class education and tourism sectors.
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Total foreign investment stock in Australia, 2000-2019
4.  A high-growth destination for foreign investment
Australia hosts approximately A$3.9 trillion of foreign investment – which includes both foreign direct investment and portfolio investment. Since 2000, foreign direct investment has risen by 8.4 per cent per year, while other investment has risen slightly faster at 8.6 per cent. As a percentage of GDP, Australia’s total value of foreign investment stock reached 196 per cent in December 2019, up from just 120 per cent in 2000.
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Main sources of foreign direct investment stock in Australia, 2009-2019
5.  Australia’s foreign direct investment tops A$1 trillion
Australia’s ability to attract investment helps keep the economy on strong foundations. Australia’s stock of inward investment reached A$1.02 trillion in 2019, up 2.5 per cent on 2018. This was a modest rise by recent standards: from 2009–2019, Australia’s stock of foreign direct investment grew at a compound annual growth rate of 7.6 per cent. Investment from China, Canada, Malaysia, Hong Kong SAR and Korea grew particularly quickly. Nevertheless, Australia’s two largest overseas investors remain the US and the UK, with holdings equivalent to 10.3 per cent and 6.4 per cent of GDP, respectively.
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Foreign direct investment stock in Australia by industry – value and percentage share
6.  Foreign direct investment targets mining and manufacturing
Investment powers productivity and growth in some of Australia’s most valuable export industries. In 2019, the mining sector accounted for 35.3 per cent of the total stock of overseas investment in Australia, worth over A$360 billion. Next came Australia’s manufacturing sector, which attracted A$131 billion of overseas investment and then financial services, with A$113 billion in investment. This distribution of foreign direct investment (FDI) is being steadily rebalanced, with FDI in services growing approximately twice as fast as FDI in goods industries.
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KOF Globalisation Index
7.  A highly globalised society and economy
When considering a wide range of economic, social and political factors, Australia is one of the most globalised countries in the world. According to the KOF Globalisation Index, Australia ranked number two in the Asia- Pacific region in 2017, after Singapore. The top most globalised countries are Switzerland, Netherlands, Belgium, Sweden and the UK. Globally, Australia was ranked 25th, after the US (23rd) and well above many major trading economies, such as Korea (34th), Japan (36th), China (81st) and India (95th).
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Restrictiveness in trade in services: Australia, OECD and non-OECD countries
8.  An open trading economy for services
According to the OECD’s Services Trade Restrictiveness Index, trade in services in Australia is significantly less restricted than the average for OECD and non-OECD countries. In 2018–19, two-way trade reached almost A$200 billion – more than triple the value 20 years ago. This represents an annual growth rate of 6.3 per cent over the past two decades.
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Australia’s free trade agreements
9.  Australia’s liberalised trade with Asia
Australia has entered into 14 free trade agreements (FTAs), including with the US, China, Japan and Singapore, and with countries participating in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. These FTAs cover 70 per cent of Australia’s existing trade and this proportion is expected to exceed 80 per cent if FTAs currently under negotiation are finalised.Today’s network covers multiple export sectors, from agriculture and seafood to minerals and energy. They make Australia a natural gateway for trade between Asia-Pacific economies, and countries in North America and Europe. This FTA network is steadily expanding. In June 2020, Australia commenced negotiations with the UK to conclude a post-Brexit FTA.
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