International trade remains one of the essential vehicles of growth in the Australian economy, a new report has found.
The report by the Chartered Accountants Australia and New Zealand (CA ANZ) revealed exports currently account for close to 30 per cent of the world’s GDP.
And Australian exports will increase by $80 billion in the next five years.
“This is despite the nationalist economic policy agenda that we are seeing in places such as the United States and United Kingdom,” said Chartered Accountants, Policy Leader, Geraldine Magarey.
“We are in unchartered waters, having two countries Australia historically has looked to for economic leadership, go down a protectionist path within 12 months of each other.”
Ms Magarey said international trade is essential to our modern economy and an important contributor to our economic prosperity.
“It is imperative that we communicate the benefits and opportunities of international trade better,” she said.
FTAs ‘bad for the economy’
Surprisingly, a separate report shows that in 2015, nearly a third of Australians viewed the free trade agreements with Japan, Korea and China as bad for the economy.
“The nationalist trade rhetoric is completely out of synch with the reality,” said Ms Magarey.
Co-written by CA ANZ and Deloitte Access Economics, The Future of Trade: Are we ready to embrace the opportunities? outlines the trend of trade agreements, which have gone from multilateral to bilateral and regional.
“The 1990s and 2000s saw a proliferation of bilateral agreements and regional trade agreements, which have had flow-on effects to our regional area,” said Ms Magarey.
“The report details how the Australian beef industry has outperformed major international competitors in the beef export stakes, exporting 1.29 million tonnes in 2015, making it the world’s largest exporter of beef.
“The Australian agreements with ASEAN in 2010, Japan in 2014 and China in 2015 reduced beef tariffs for those countries, and saw positive domino effects in our local industry,” said Ms Magarey.
Access to bigger markets
International trade provides access to bigger markets and sales growth, the report says.
Technology allows suppliers to promote products through online platforms for trade and new delivery models.
In late 2015, Bindaree Beef Group used the online platform JD.com to become the first to offer Chinese customers chilled, retail-ready Australian beef directly online.
The new report, to be launched at the National Press Club, Canberra, today, outlines key factors influencing the direction and nature of trade in the future – globalisation, technology and policy.
These issues are analysed with questions for policy makers and industry about how they will embrace the future.