Free Trade and Protection
Significance of Trade to the Australian Economy
Why is Trade Significant?
-
Expands a country's consumption possibilities by accessing other country's production through imports.
-
Increases a nation's output through exporting.
-
Exports pay for imports a country needs to enjoy high standards of living.
-
Exporting enables Australian firms to produce for a world market - potential 7 billion rather than a smaller domestic market.
-
Importing allows Australian households to consume goods and services that cannot be produced domestically or is too expensive to produce domestically.
-
Engaging in trade permits increases specialisation, economies of scale, increased productivity and higher real incomes.
-
There is a strong link between countries with fast growth rates in trade and high rates of economic growth.
Trade Statistics
-
Two-way trade in Australia is worth an estimated $670 billion
-
Exports were valued at $316.6 billion in 2015, 22.6% of GDP
-
Imports were valued at $352.7 billion in 2015
-
Australia's trade intensity in 2015 (Exports + Imports as a % of GDP) is 41% (Source: World Bank)
A Brief Look at Trade Intensive Sectors
Tourism
-
Direct tourism is valued at $47.5 billion or 3% of GDP in 2014-15 (Source: Austrade)
-
Tourism directly employs an estimated 580,800 people or 5% of the workforce (Source: Austrade)
-
Personal travel makes up Australia's 5th largest export valued at $14.227 billion
Mining
-
Iron ores & concentrates makes up Australia's largest export valued at $66.008 billion
-
Coal makes up Australia's second largest export valued at $37.999 billion
-
China is Australia's biggest trading partner, to which we export $38.864 worth of Iron ore & concentrates
Agriculture
Increased Asian incomes, especially in China, has seen a rise in demand for high quality Australian agricultural exports.
-
Exports of beef are valued at $7.751 billion
-
Exports of wheat are valued at $5.920 billion
-
Exports of beef to China are valued at $1.005 billion (2015)
-
Exports of beef to the United States are valued at $3.076 billion (2015)