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2020 marks the 15th anniversary of the United States-Australia Free Trade Agreement (FTA), which was ratified on January 1, 2005. Since its inception, the FTA has significantly benefited both the United States and Australia. The U.S.-Australia FTA has ushered in an era of economic partnership and flourishing trade and has paved the way for broader cooperation and integration between the two countries. Here are 5 reasons to celebrate the 15-year anniversary of this historic agreement.
1. The U.S.-Australia economic partnership benefits both countries.
The U.S.-Australia FTA has enhanced the two countries’ economic partnership by creating pathways to greater two-way investment. The FTA has nearly tripled two-way investment between the two countries and now stands at US$1.3 trillion. Accounting for a quarter of foreign investment in Australia, the U.S. is one of Australia’s biggest foreign investors.
Australia is now the 9th largest source of foreign direct investment in the United States. Before barriers to international travel brought on by COVID-19, travel services were the largest export from Australia. In 2019, 1.3 million Australians visited the United States in a tourism capacity and spent US$7.5 billion on tourism expenses.
2. The U.S.-Australia FTA has created a flourishing trade environment.
The FTA eliminated previous trade barriers, resulting in a doubling of trade between the two countries. In 2019, two-way trade between the U.S. and Australia reached US$67 billion. As of 2019, the United States’ third largest trade surplus was with Australia, reaching US$28 billion.
Trade with Australia contributes to roughly 300,000 jobs in the U.S. in sectors including manufacturing, motor vehicles, airlines, telecommunications, and pharmaceuticals. U.S. companies supported by these jobs include Ford, Jeep, Boeing, United Technologies, Cisco, Qualcomm, Motorola, Pfizer, and Merck.
3. The U.S.-Australia FTA has enabled business cooperation and powered innovation.
Innovations at U.S. companies Google and Ford demonstrate the value of the close economic ties enabled by the FTA.
Ford employs Australians working with global designers and engineers on its Ranger pickup truck. The truck is then built in locations around the world, including back in the U.S. The vehicle is then sold in the U.S., Australia, and other international markets.
Google’s experience, too, demonstrates collaboration’s effect on product development. The commonly used Google Maps function started off as an Australian startup and was acquired by Google in 2004. Google has since integrated the maps feature into its broader system which is now used worldwide.
4. Close economic ties have proven mutually beneficial in times of economic and health uncertainty.
The FTA has strengthened the economic relationship between the U.S. and Australia and both countries have acted to help each other in times of need.
Most recently, during the initial months of COVID-19, Australian company Lendlease contributed to New York City hospitals’ pandemic preparedness and response. Also during COVID-19, Lendlease assisted the U.S. Army to manage lodging accommodations for the National Guard mobilization and additional distribution of medical professionals. Lastly, during COVID-19, Lendlease aided military families by offering them over 12,000 hotel rooms at a special rate.
Earlier this year Facebook donated to Australian relief efforts during the devastating wildfires. During the fires, Facebook announced several philanthropic measures to help Australian communities in the face of this devastation, including a donation of $250,000 to the Australian Red Cross and matching donations of up to $1 million to GlobalGiving, a platform facilitating this philanthropic effort.
These are just two recent examples of wide-ranging partnership and corporate social responsibility efforts that flourish thanks to the two countries’ close economic ties.
5. The FTA has served as a vital economic complement to the U.S.’s robust security and military partnership with Australia.
The FTA has solidified the robust economic partnership with the U.S. and Australia, which joins close military and national security cooperation to form one of the U.S.’s most enduring alliances. Together, the U.S. and Australia are partners on a range of global issues, including in the strategically vital Indo-Pacific region.
On this 15th anniversary of the U.S.-Australia FTA, we can appreciate the agreement’s place in the broader bilateral relationship, see the economic benefits already enjoyed by both countries, and look to its contribution to prosperity in the years ahead.