- 89% of Australian companies are positive about international trade opportunities, compared with a global average of 78%.
- China is still considered the top growth market, with Japan second followed by the US.
- Australian companies are optimistic about the benefits of trade agreements.
Australian enthusiasm for free trade has not been dampened by US-China trade tensions, according to research by HSBC.
Local companies are optimistic about international trade opportunities, with 89% in Australia positive about the current environment compared to a global average of 78%.
“Australia’s ever-increasing linkages with the Asia-Pacific region appear to be bolstering local trade confidence, as is the prospect of a Free Trade Agreement (FTA) with the European Union,” says Steve Hughes, Head of Commercial Banking, HSBC Australia.
“Strong trade ties, underpinned by existing and future FTAs, continue to support Australia’s economy and reinforce the importance of trade liberalisation efforts.”
The HSBC Navigator survey shows China is considered the top growth market for Australian firms over the next three to five years.
And there’s been an increase in the number of companies turning to Japan for growth.
“This underscores the benefits of increased access for Australian goods and services under the Japan-Australian Economic Partnership Agreement (JAEPA), which cut tariffs for the fifth time earlier this year, and the CPTPP that will build on these outcomes,” says Hughes.
JAEPA has offered preferential or duty free access to more than 98% of Australian exports, including the elimination of tariffs on horticulture, such as fresh mangoes and berries.
Under ChAFTA (China-Australia Free Trade Agreement), 98.5% of Australian goods enter China duty free or under preferential rates and China is the top destination for Australian service exports, valued at $15.8 billion.
Australia’s trade ties in the Asia Pacific will be reinforced by the potential signing of the Indonesia-Australia Comprehensive Economic Partnership Agreement, which will give business greater access to a country that is forecast to be the world’s fifth largest economy by 2030.
Half of Australian firms surveyed are optimistic that the trade deal under negotiation with Europe will have a positive impact on their businesses by broadening their trading opportunities outside the Asia Pacific region.
“Although not geographically close, the EU and Australia share similar policy orientations,business cultures, high standards for labour and the environment,” says Hughes.
“An agreement between these two economies could see an uplift in exports from the EU’s machinery, automotive and textiles sectors, and a dramatic increase in exports of beef and sheep meat from Australia to the bloc.”
They survey results:
The HSBC Navigator survey is compiled from responses by decision-makers at over 8,650 businesses – from small and mid-market to large corporations in 34 markets. 200 businesses were surveyed in Australia.