(August 13, 2008) California trade relations with the Australian state of Victoria were among the topics discussed during a recent meeting at the California Chamber of Commerce.

Victoria —which is located in southeast Australia — is home to 5 million people with 3.6 million living in the capital city of Melbourne. In 2007, the United States exported $19.2 billion worth of goods to Australia, a 35 percent increase since 2004, the year before the U.S.-Australia Free Trade Agreement (FTA) went into effect.

Australia is California’s 12th largest export market. California is the largest state exporter to Australia, with more than $2.8 billion in exports from California to Australia in 2007. Australian companies employ more than 84,000 U.S workers.

U.S.-Australia FTA

On January 1, 2005 the U.S.-Australia FTA went into effect. The agreement eliminated tariffs on 99 percent of U.S. manufactured goods exported to Australia, accounting for 93 percent of all U.S. exports to the nation.

The agreement has improved the business climate between the two nations. This is the first FTA between two developed countries since the U.S-Canada FTA in 1988. Some of the industries that have benefitted the most from the increase in exports include, coal, oil, gas, machinery and equipment.

Ideal Trading Partners

The United States and Australia share impressive economic growth and productivity growth. Both have a strong commitment to trade and investment liberalizations. With the legal, regulatory and ideological similarities between the United States and Australia, Australia is an ideal trading partner.

The United States and Australia have major interest in each other’s economies. The Unites States has long had a large trade surplus with Australia. The Unites States is the largest investor Australia, while Australia is a major investor in the United States.

On July 21, CalChamber hosted (from left to right) Andrew Dyer, commissioner to the Americas, Susanne Stirling, CalChamber vice president of international affairs and Deborah Komessaroff, from the Victoria Business Office.

Victoria boasts as one of the largest Research and Development clusters in the Southern Hemisphere and is recognized as a world leader in international stem cell research.

U.S. producers of transportation equipment, non-electrical machinery, computer and electronic products and chemicals are the strongest exports to Australia. Australia’s strength as a producer of agricultural crops has made it a magnet for U.S exports of related products, including machinery, fertilizer and chemicals.

U.S. consumers, including manufacturers of products in the United States, import a wide variety of goods from Australia. Manufactured food products, including meat products and transportation equipment, are the largest U.S. imports from Australia. Other key imports include primary metal manufacturing products, beverages (including wine) and chemicals. More than half of U.S. imports from Australia are inputs or capital goods used to manufacture products in the United States.

California Trade Office

As a result of the significant level of trade and investment between Victoria and California, the government of Victoria operates a representative office in California. Based in San Francisco, the office is staffed with experts who can help California companies with trade and investment inquiries. For more information visit their website at www.investvictoria.com.

Staff Contact: Susanne Stirling