Country and Regional Information - Department of Foreign Affairs and Trade

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Foreign and trade policy

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“Travel, Work, Discover” – the banner on the façade of the Australian Embassy promoting the Working Holiday Visa agreement between Australia and France, March 2004.

Australia’s foreign and trade policy aims to advance the security of the Australian nation and the prosperity and wellbeing of the Australian people. In response to the dynamic and challenging international environment, Australia is pursuing a wide range of bilateral, regional and multilateral strategies to achieve this aim. Key objectives include tackling terrorism, countering the spread of weapons of mass destruction and other global threats to Australia’s security, and securing further improvements in access to overseas markets for Australian goods and services.

The Australian economy is strong and increasingly integrated with the global economy. This, along with democratic institutions, cultural diversity and a record of constructive international engagement, underpins Australian participation in world affairs.

Key components of Australia’s security strategy include a strong national defence capability; the alliance relationship with the United States; bilateral defence and security relationships with Asia Pacific countries; and multilateral security links, especially through the Association of South-East Asian Nations (ASEAN) Regional Forum. Australia is closely engaged in international counter-terrorism efforts both regionally and around the world.

Close engagement with Asia is an imperative for Australia, and bilateral political, security and people-to-people links between Australia and many Asian countries are strong and sophisticated. Economic relations are characterised by extensive two-way trade and investment and the development of comprehensive bilateral free trade agreements with a number of countries in Asia. Japan and China are Australia’s largest and third-largest export destinations respectively.

The United States of America is among Australia’s most important economic partners, and its closest security ally. Australia’s relationship with the United States is fundamental to Australia’s prosperity and security, and is founded on a long tradition of defence cooperation, shared democratic values, extensive economic ties and other common interests.

Australia engages closely with Europe on major trade and security issues. Bilateral links with European countries complement Australia’s direct dealings with the European Union.

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Police officers from around the Pacific patrol the docks of Honiara, Solomon Islands, as part of the Regional Assistance Mission to Solomon Islands
Brian Hartigan/Australian Federal Police

Australia has a strong interest in stability and economic viability in the South Pacific. It is the largest provider of development assistance and a major trade and investment partner for South Pacific countries. Australia works closely with New Zealand in the South Pacific, and in many other areas of shared interest.

Australia also places importance on its expanding ties with countries in the Middle East and South America, and links with countries in Africa.

Australia takes an active approach to improving human rights standards and systems through the United Nations (UN), the Commonwealth and through bilateral dialogue. It supports UN efforts to promote multilateral cooperation in areas such as international peace and security; development of international legal norms; provision of humanitarian assistance; and protection of the environment and sustainable development.

Australia’s trade policy advocates a strong rules-based global trading system that guarantees access to overseas markets and provides a predictable and fair environment for its exporters.

As a medium-sized power with diverse trade and investment interests, Australia’s top trade priority is the pursuit of global trade liberalisation through the World Trade Organization (WTO).

Australia is one of the world’s most efficient agricultural producers and is keen to ensure WTO agricultural trade reform. It chairs the influential Cairns Group of agricultural fair traders—a coalition of developed and developing countries from Latin America, southern Africa and the Asia Pacific region.

Australia is a strong proponent of market-access reform for services and industrial products. The global welfare gains from halving protection for these areas are immense— US$250 billion for services and US$66 billion for manufactures.

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Australia provides technical assistance and capacity-building programs to developing countries to strengthen their ability to participate in trade negotiations and facilitate trade liberalisation. Australia has made multi-year commitments of approximately $275 million in direct trade-related assistance to developing countries, including an estimated $32 million in 2004–05.

Australia is committed to achieving the Asia–Pacific Economic Cooperation (APEC) goals of trade and investment liberalisation, business facilitation and economic and technical support. Over the past decade, APEC economies generated nearly 70 per cent of global growth. In the same period, some 165 million people escaped poverty and 195 million new jobs were created in APEC’s 21 member economies.

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Australian Prime Minister John Howard (back row, fourth from left) with other APEC leaders, Chile 2004
Peter West/Auspic

Australia’s regional economic presence is enhanced by two key agreements: the Australia–New Zealand Closer Economic Relations Trade Agreement (CER) and the ASEAN Free Trade Area (AFTA) Closer Economic Partnership. These aim to double trade and investment in the region by 2010 by improving commercial cooperation and eradicating non-tariff barriers to trade.

Australia has signed or is pursuing WTO-consistent free trade agreements (FTAs) with several major trading partners. These bilateral deals can deliver great benefits where parties are willing to move faster and undertake more profound liberalisation than can be achieved by the entire WTO membership.

In 2004, Australia and the United States successfully concluded negotiations on a free trade agreement. The Australia–United States Free Trade Agreement (AUSFTA) will boost Australia’s trade with the world’s largest economy, which represents a third of the world’s GDP.

In October 2003, the Australian and Thai prime ministers announced the conclusion of negotiations on a comprehensive free trade agreement. The Thailand–Australia Free Trade Agreement was signed in 2004, and established a new trade platform for Australia and the second-largest economy in South-East Asia when it entered into force in January 2005.

The Singapore–Australia Free Trade Agreement (SAFTA) came into force in July 2003. Singapore is Australia’s seventh-largest trading partner, with Australian merchandise exports to Singapore worth $3.5 billion in 2003.

Last update May 2005