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)​

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