Abstract
Earlier in April, the WTO Secretariat issued its report of the ninth trade policy review of Australia. The reports highlights Australia's economic growth over the period. Australia witnessed growth in various sectors such as intellectual property and mining. Australia has also witnessed growth in its overall trade owing to the several reciprocal trade agreements it has entered into in this review period. Furthermore, it has aimed to improve its manufacturing segment by implementing several policies focussed on 'Future Made in Australia'. However, Australia's participation in trade remedies has diminished significantly in this review period.
Introduction
The WTO issued its ninth trade policy review report of Australia pursuant to the review meeting on 12th and 14th March 2025. The review covers changes and developments in the trade policies of Australia during the period of review, that is, from 2020-2024. The report focusses on steps taken by Australia to significantly grow its trade by entering into several regional agreements and multiparty agreements with WTO member states.
As per the report, Australia's GDP averaged over 2.2% and was able to quickly recover from the severe impact of the pandemic as compared to similar sized economies. Australia continued to support its economy by exporting raw materials and importing finished goods. In 2021, major exports from Australia included exports of raw materials such as iron ore, coal, LNG and other mineral products while major imports were of machinery and transport equipment. The Intellectual Property sector remained important for economic growth and international trade for Australia. The mining sector witnessed prominent growth and accounted for 11.4% of the GDP. The agriculture sector's value of production increased by 33% in 2019-20 and exports by 52% resulting in a stagnantly consistent contribution.
China followed by Japan and South Korea emerged as Australia's leading trading partners during the period of review. The merchandise export increased to 66.4% in 2023 and outpaced import growth as well as growth in trade in services. Some of the key observations pursuant to the review are highlighted below.
Policy Reforms
In April 2023, Australia launched the Ministerial Council on Trade and Investment with the aim to enhance internal trade and investment policy coordination by emphasizing on free and fair-trade including investment diversification attracting FDI. Australia submitted two notifications under Article 25 of the Agreement on Subsidies and Countervailing Measures during the review period whereby it reported that the environment and energy sectors received the highest subsidization to support renewable energy. Further, the Government of Australia, in the 2024-25 Budget, announced an investment of 22.7 billion Australian dollars in the 'Future Made in Australia' to maximise industrial benefits focussing on attracting investment to make Australia a leader in renewables. In September 2023, National Reconstruction Fund was established to facilitate increased inflow of finance aiding for diversification of the industrial sector through targeted independent investment decisions undertaken by a board at arm's length from the Government.
Tariffs
Amidst multiple new policy measures on tariffs, Australia has taken a massive step in autonomously eliminating custom duties on 457 tariff lines. Some of the products subject to elimination are wood and paper products; textiles and apparel; machinery and electrical equipment, etc. Tariffs on electric vehicles have also been removed in order to reduce costs borne by traders to achieve Australia's carbon reduction target, which was a significant development in the import regime. There has been a temporary reduction in duty for imports from Ukraine while 35% hike has been imposed on imports from Russia and Belarus.
Regional and Multilateral Trade Agreements
Australia witnessed significant increase in trade from 27.1% to 27.5% under FTA preferences. Merchandise imports from FTA trading partners rapidly grew at a 13.1% rate as compared to imports from other countries. Therefore, Australia continued to pursue reciprocal trade agreements by entering into seven new agreements with members concentrated in the Asia Pacific region during the review period. Out of the seven agreements, bilateral agreement with Indonesia was built on previous agreement, and two multi-party agreements were built on the existing agreements namely, Pacific Agreement on closer Economic Relations Plus (PACER Plus) and RCEP. Four new bilateral agreements were entered into with Hong Kong, India, Peru and the United Kingdom. The duty-free trade with major trading partners such as Hong Kong, India and the United Kingdom led to significant development in trade for Australia. The overlapping agreements also allowed the traders to gain benefit under the most optimal agreement.
Trade Remedial Measures
During the period, 1st January 2020 to 30th June 2024, Australia initiated 34 anti-dumping initiations, 11 anti-subsidy investigations, and imposed 11 trade remedial measures. Australia also terminated 33 anti-dumping measures. Australia was once the ninth highest user of anti-dumping measures. However, owing to interruption in international supply chains due to Covid 19 pandemic, it has witnessed a steep decline in the trade remedial investigations initiated since 2020. Most of the anti-dumping measures were against trading partners in Asia such as Malaysia, South Korea, Vietnam, Indonesia, etc. while the anti-subsidy investigations were against China. Majority of the trade remedial measures involved the metal sector, while rest of the measures involved paper and plastic products. Additionally, Australia did not make use of safeguard measures during the period of review.
There has also been a decline in Australia's participation in WTO Dispute Resolution proceedings as a third party, that is, by almost 50% during the review period. However, Australia has participated in Multi-party Interim Appeal Arbitration Agreement invoked under Article 25 of the Dispute Settlement Understanding
Conclusion
Amidst several crumbling economies in the wake of covid pandemic, Australia was able to witness a growth trajectory sooner than other advanced economies. The report evidences that Australia is no longer a major user of the trade remedial measures given that very few trade remedial investigations have been undertaken by Australia. Australia has enacted polices to attract foreign investment as well as to strengthen its own manufacturing sector. Australia's initiatives such as National Reconstruction Fund, National Rail Procurement and Manufacturing Strategy, Critical Minerals Accelerator Initiative, etc. and the mutual agreement between several WTO member states in terms of bilateral, regional and multi-party agreements, will enable Australia to expand its role in international trade.
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