At a glance
- Australia’s economy relies heavily on international trade, which accounts for 31% of GDP and supports one in four jobs, particularly in mining, agriculture, and education exports. Â
- Diversifying trade partnerships and leveraging renewable energy opportunities are key to future growth. Â
- Policies aim to ensure the benefits of trade reach regional communities and First Nations businesses.Â
Australia’s economy thrives on the back of international trade and investment, enabling Australians to access a diverse range of goods and services at competitive prices while driving innovation and productivity through global competition. The DFAT report examines key export industries, including mining and agriculture that have strengthened Australia’s economic standing.
Trade accounts for $577 billion in 2021-22. Nearly one in four jobs depends on trade, offering wages 11% higher on average in export-related industries. The mining sector, responsible for 57% of goods exports, remains a linchpin, while agriculture adds $70 billion annually through commodities like wheat and beef.
Services also dominate, particularly education, where international students generate $40 billion in export revenue. Tourism, another key sector, is rebounding post-pandemic, further diversifying income streams.
Countries such as China, Japan, and South Korea are driving the demand for Australian goods. They remain Australia’s largest markets, with China representing 34% of total exports.
While this region remains essential, the report emphasises the importance of trade diversification to manage risks posed by over-reliance on any single market. Trade with the US and EU, valued at $78 billion and $54 billion respectively, underscores the importance of diversification.
Foreign direct investment accounts for $4.2 trillion Â
International investment drives job creation, innovation and infrastructure development. For example, foreign capital supports high-profile projects across energy, real estate and technology, fuelling long-term national growth. Foreign direct investment (FDI) accounted for $4.2 trillion as of 2022, supporting projects across energy, real estate, and technology.
Australian investment overseas creates reciprocal benefits by enhancing the global reach of domestic companies. Australian investments abroad, now worth $3.3 trillion, extend the global reach of local industries.
The report identifies trade opportunities in renewable energy exports, including green hydrogen, to meet global demand for low-emission alternatives.
Trade challenges Â
The report touches on the importance of sustainable trade policies to address environmental concerns, particularly as the world transitions towards renewable energy sources. Australian industries have opportunities to become leaders in clean energy exports, including hydrogen, by capitalising on the country’s natural resources and research capabilities.
Inclusivity is another priority highlighted by DFAT. Policymakers are increasingly focusing on ensuring that the benefits of trade and investment extend to all Australians, including regional communities and Indigenous populations. Inclusive trade policies aim to bridge regional inequalities and empower First Nations businesses to compete internationally.
The report reinforces trade and investment being the twin drivers of Australia’s prosperity that must balance economic, environmental and social priorities to support expansion of the country’s global economic footprint.
