The rise contributed to this year’s record trade surplus of $20.9 billion and was significantly higher than the growth in imports of goods and services, also up more than seven percent. According to a Department of Foreign Affairs and Trade (DFAT) publication, Composition of Trade 2010-11, this growth in exports was largely led by the mineral sector which recorded a growth of more than 48 percent. A 21.7 increase in fuel exports also contributed to the record year.

According to the report, China came out as Australia’s strongest two-way trade partner, followed by Japan and the United States. The report also shows that Australia’s top three exports were iron ore and concentrates, coal and education-related travel services.

The release of this document marks a new era in DFAT reporting, with an accompanying range of tables allowing users easy access to trade time series data. More information and the accompanying tables can be found on the DFAT website.

According to the report, titled The APEC Region – Trade and Investment, 2011, produced by The Department of Foreign Affairs and Trade, Australia’s exports to the region grew in 2010 by 17 percent. Imports, in comparison, grew six percent to $182 billion.

APEC accounted for 46 percent of the world’s total exports in 2010 and 56 percent of world GDP, demonstrating the importance of the Asia-Pacific region to the world’s economies. This is further demonstrated by the APEC region increasing exports to the world by 26 percent to US$8.7 trillion in 2010.

The region’s importance to Australia was also highlighted in the report, showing APEC accounted for more than two-thirds of Australia’s exports and imports.

The US was the largest exporter in APEC in 2010, with world exports of $1.8 trillion, closely followed by China with exports of US$1.7 trillion and Japan with exports of US$911 billion. Most of APEC’s trade is among other members, with 68 percent of exports and 65 percent of imports coming from within the region.

The complete publication and analysis is available through DFAT.

The twin disasters and the disruption they have entailed add a further layer of complexity for foreigners doing business in Japan. While cracking the Japanese market can appear a daunting task at first, Australian investors and exporters should not be perturbed as it is a rewarding market in which to expand, once you are established.

As well as the obvious language differences, there are many more subtle nuances of business custom you need to understand when working in Japan.

I moved to Tokyo full time in October 2010, to launch Travelex’s Corporate Payments business in the Japanese market and oversee our growth strategy in the Asian region. We recently signed a major deal with the Rakuten Group, the largest e-commerce company in Japan and one of the top ten e-commerce companies in the world, to provide international payments and foreign exchange capability to customers of the group’s online bank, Rakuten Bank. Finalising this partnership and launching our joint service provided me with a unique insight into the Japanese business culture; a culture that is process driven and details oriented.

The Japanese culture is meticulous. Anyone wanting to undertake business here needs to understand that there are clear processes to follow and that these processes can seem onerous from an outsiders’ perspective. Take for example, the relatively simple act of buying a new mobile phone or renewing your driver’s license. In Australia, both are simple procedures. In Japan, it can take many hours due to the particular processes to be followed. Equally, there are long processes to overcome when doing business, so for Westerners who are accustomed to things moving quickly, learning to be patient is integral.

Japanese executives use meetings differently than we might in Australia. While we would expect a meeting to conclude with consensus and solid resolutions, it can often take multiple meetings and lots of follow up questions to reach that point in Japan. The level of detail that would ordinarily satisfy an Australian client will typically be met with several rounds of follow up questioning, with each meeting being used to accumulate information. That’s why it is best to put things in writing, sending though important information ahead of time, so that the meeting has clarity and defined scope.

“The Japanese earthquake and tsunami have knocked one of Australia’s most important tourism markets, particularly in Queensland,” said Federal Minister for Tourism Martin Ferguson, in response to the latest figures from the Australian Bureau of Statistics (ABS).

In March, overseas short-term visitor arrivals fell by 5.1 percent compared with the year before. There was some growth, however, as arrivals from China increased for the 14^th consecutive month, up 16.7 percent.

Ferguson said although traditional markets like the US, UK and Japan remain high-yielding for Australia, both Tourism Australia and the federal government have put funding elsewhere. “We’ll continue to aggressively market into China,” he said.

As more Australians chose to holiday at home, overseas short-term resident departures fell for the first time in 23 months. Both state and federal governments have contributed to a $12 million tourism recovery package, aimed at dispelling myths about the recent devastation in Queensland, which may explain the shift.

“The fact is the majority of Queensland’s tourism regions have suffered minimal or no damage and the majority of those affected are now open and operating normally,” said Jan Jarratt, Minister for Tourism in Queensland.

The man responsible for that is Richard Rains, chief executive officer of Sanger Australia. Sanger is a stalwart of the Australian meat industry, marketing Australian meat all over the world since 1973. “It’s a very exciting industry to be a part of,” Rains says.

Through seasonal changes, volatile currencies, market growth and market decline, people still eat protein. And as the world’s second largest exporter of beef, Australia is well placed to supply a world hungry for red meat. Sanger is a trader and marketer, representing abattoirs based in regional and rural Australia from its busy Sydney office.

Where many competitors have folded, and foreign entities have come and gone, Sanger has stood the test of time. Rains puts that down to some natural advantages in the Australian agricultural industry and a willingness to bend over backwards to satisfy customers. “We play the game with a very straight bat and we’re very well supported by our supply base, which we work very closely with. We’re well banked, maintaining strong relationships with HSBC and Westpac. That has stood us in good stead, enabling us to take advantage of whatever opportunities have arisen around the world.”

Supplying the world

Sanger has used strategic partnerships to access markets where Australian meat previously has been unable to achieve significant share. McDonald’s has been an extremely valuable customer. “McDonald’s are the most discerning customer that we supply. Their standards and requirements are extraordinarily high. It’s an enormous machine, but as long as you can dance to their tune it can be very rewarding,” Rains says.

Sanger’s partnership with McDonald’s helped the company access the notoriously protectionist American meat market. Australian lean beef is in demand in the USA to value-add their domestic production, Rains explains. Most US produce is lot-fed cattle which, after processing, leaves independently worthless fatty trimmings. The trimmings can be combined with Australian lean beef to produce tender ground beef. Since over 50 percent of America’s red meat consumption is in minced meat form, the American market is very important for Australian exporters.

Rains also speculates exports to America will increase as domestic beef production declines. The US government heavily subsidises ethanol production, making farming corn more profitable than farming livestock. United States beef herds are at their lowest numbers since the 1950s.

Unlike the American market, which is driven by price, the Japanese market is very brand conscious, Rains says. As it is the largest national market for Australian meat, Sanger has been at pains to establish a strong reputation there. “We make sure we are producing absolutely to the customer’s specific requirements in terms of the meat used and type of packaging. Australia is very familiar with producing product to a buyer’s absolute specification.”

Managing risk

Sanger took on the marketing for a Brazilian poultry processor five years ago. Rains was attracted by the scale and professionalism of the meat industry in Brazil. “I was surprised by the attitude of people in the industry. It’s forward looking and proactive, it’s an exciting place as opposed to Australia where the red meat industry has been in survival mode for a number of years.” He also saw an opportunity to minimise risk against of a disease outbreak in Australia by going to a different continent and being involved with a different protein.

Gillard will begin her trip in Japan to show Australia’s support for the Japanese people following the recent devastating earthquakes and tsunami and the ongoing nuclear disaster. Meeting with the Emperor and Empress of Japan and Prime Minister Naoto Kan, Gillard hopes to discuss ways to advance Australia’s comprehensive security and economic partnership with the country.

In South Korea, Gillard will lead a service commemorating the 60th anniversary of the battle of Kapyong, and mark Anzac Day by attending a dawn service. She will also meet with President Lee Myung-Bak and Prime Minister Kim Hwang-sik, focussing on security concerns on the Korean peninsula and strengthening the Korea-Australia economic partnership.

In Beijing, she will meet President Hu Jintao and Premier Wen Jiabow to discuss ways to enhance regional cooperation and build the trading relationship between the two countries. China is currently Australia’s top two-way trade partner. Gillard will also attend a roundtable of CEOs of major Australian and Chinese corporations and speak at the Australia-China Economic Trade Cooperation Forum.

“The earthquake and tsunami will cut demand for our bulk commodity exports in the short term and likely slash around $2 billion from export earnings in 2010-11.”

Japan is Australia’s second biggest trading partner, buying $37.1 billion of Australian exports in 2009-10. It is one of Australia’s biggest markets for coal and iron ore. The 11 March earthquake and tsunami claimed 28,000 lives (total of the dead and missing) and left an estimated $309 billion of damage in its wake.

Swan said he expected the ongoing crisis in Japan to take less than a quarter of a percent off GDP growth this financial year. But the news follows treasury projections that the floods and cyclones Australia experienced over the summer will cut half a percentage point from GDP. “Treasury estimates the cost to our economy will be around $9 billion, with the vast majority of that being felt in the resources and agricultural sectors.”

Swan warned that the drop in exports and costs of rebuilding at home will have significant implications on the new budget due to be released in May this year.

“Weaker growth will clearly mean that revenues take a substantial hit in the near-term … as the Prime Minister said last week, there’ll need to be some tough decisions in the budget as we stick to our strict fiscal rules.”

In his statement, Stevens said the Reserve Bank would continue its “mildly restrictive stance of monetary policy” as the general macroeconomic outlook was strong. While the Bank expects Japanese production will decline dramatically following recent natural disasters, Stevens predicted the decline will not significantly impact the wider Asian region.

Stevens also credited Australia’s high terms of trade and growing national income as contributing factors to the decision to keep the rates unchanged. The RBA announced its decision before the Australian Bureau of Statistics revealed Australia’s terms of trade shrank dramatically in February, recording a trade deficit for the first time in 12 months.

Rising commodity prices have helped boost the Australian economy while driving consumer inflation in other parts of the world. While exports are down and outputs from resource-rich states Queensland and Western Australia have diminished in the face of January’s natural disasters, Stevens said production levels should recover within months.

Australia exports 9,600 tonnes of uranium oxide (used in the production of nuclear power) each year, to the value of over $1.1 billion. But shares in Australia’s biggest uranium exporters have tumbled by up to 23.89 percent during the unfolding nuclear crisis in Japan. A Russian company withdrew its US$1.16 billion offer for Australia’s Mantra Resources last week, saying the nuclear crisis in Japan had “fundamentally altered the Australian company’s long term value”.

Japanese authorities are struggling to cool overheating fuel rods inside the Fukushima No 1 plant’s reactors. The plant’s cooling system was incapacitated by the recent earthquake and tsunami. If the reactors cannot be cooled the plant risks meltdown and a massive radiation leak.

But Australian industry executives remain confident about the future of nuclear power. “The factors which were driving the demand for Australia’s uranium and the demand for nuclear power last Friday are still the same today,” said Australian Uranium Association chief executive Michael Angwin.

Opposition foreign affairs spokesperson Julie Bishop said the world cannot reject nuclear power.

“If your top priority is to reduce global greenhouse gas emissions then nuclear power—as a low-emissions base-load power source—must continue to be in the mix.”

A spokesperson for the Department of Foreign Affairs and Trade said it is too early to make an assessment of the trade and economic impacts of the earthquake and tsunami. Spokesperson for Austrade Lincoln Wright said it is too soon to quantify the impact on trade between the two nations as Japan is “very much still in a search and rescue phase”.

But Japan is one of Australia’s most important trading partners, buying exports worth A$37.1 billion in 2009-10. It is one of Australia’s biggest markets for coal, beef, iron ore and other metals. Australia’s services trade with Japan is worth A$1.9 billion. Exporters should expect most trade to be suspended as Japan faces the devastating aftermath of the 8.9 magnitude earthquake.

The impact is already being felt on the stock exchange with the Japanese bourse plunging overnight. Uranium stocks have taken the biggest hit as Japan struggles to contain hazardous material in the wake of explosions at damaged nuclear reactions. Australia is the world’s third largest producer of uranium oxide, exporting nearly 10,000 tonnes a year to the value of A$1.1 billion. Japan buys about a fifth of Australia’s uranium exports. As nuclear nations around the world reconsider the safety of nuclear power, the Australian uranium industry is expected to contract.

Japan is also an important source of tourists for the Australian tourism industry. Spokesperson for the Australian Federation of Travel Agents Jayson Westbury said the “gargantuan” disasters would “decimate” the tourism exchange between Japan and Australia.

Japan already has government debt valued at 210 percent of its Gross Domestic Product. The economy is under pressure from a rapidly ageing population and deflation. When the search and rescue phase closes the Japanese government is facing billions of dollars in reconstruction and rebuilding. But economists predict the rebuilding phase will help stimulate the stagnant Japanese economy.

While the next quarter will see zero demand from Japan, as rebuilding begins the government will require raw commodities, increasing the demand for Australian exports. With much of Japan’s arable land destroyed, food imports will also rise sharply. Whether the deeply indebted nation can afford the disaster bill is another question.

This earthquake was a bigger disaster than the Great Hanshin quake that razed the Kobe region in 1995. The cost of that disaster was approximately US$114 billion, with 6,500 dead and over 150,000 buildings totally destroyed. But manufacturing production was restored to pre-quake levels within eighteen months of the disaster. Within 12 months, export volumes were at 85 percent of trade before the quake. Japan has recovered before, and in time, will recover from this.