Executive summary Australia has a long history of undertaking economic reforms aimed at realising a more flexible and resilient economy. The floating of the dollar, the deregulation of financial markets, the broadening of the tax base and corporatisation of government businesses, to name just a few reforms, have produced an economy that is better placed to take advantage of emerging opportunities and to weather global economic storms. An integral part of the reform agenda has been the sustained liberalisation of trade barriers and reduced industry protection. Throughout the 1970s, 80s, 90s and over the last decade, Australia has embarked upon unilateral, bilateral and multilateral trade liberalisation. This report updates a 2009 that quantified the economic impacts of Australian merchandise trade liberalisation over the 20 year period between 1988 and 2008. This report, as did the previous, uses economic modelling to simulate the economic impact of Australian merchandise trade liberalisation. This time, however, a 30 year trade liberalisation window (1986–2016) has been considered. Importantly, the economic modelling has only taken Australian merchandise trade liberalisation into account the modelling excludes Australian services and — investment liberalisation, and any trade liberalisation undertaken by Australia’s trading partners. As such, the economic modelling results can be seen as representing the minimum of what has resulted from Australia’s overall process of trade and investment liberalisation over the past 30 years. Trade is an important element of the Australian economy and accounts for 1 in 5 jobs Trade liberalisation undertaken by Australia over the period 1986 to 2016 has seen Australia become more integrated into the global economy and more trade orientated, with trade growing faster than nominal GDP over the period. In 2016, merchandise trade was equivalent to nearly 31 per cent of nominal GDP, up from 26 per cent in 1986. Overall goods and service trade was even larger, at just under 40 per cent of nominal GDP in 2016. Trade is also important to the Australian labour market. Using the latest input-output tables from the national accounts, it is estimated that around one in five Australian workers, or 2.2 million people, are employed in a trade-related activity. This includes workers in heavily export-focused industries like agriculture, minerals and energy, but also, importantly,
Executive summary Australia has a long history of undertaking economic reforms aimed at realising a more flexible and resilient economy. The floating of the dollar, the deregulation of financial markets, the broadening of the tax base and corporatisation of government businesses, to name just a few reforms, have produced an economy that is better placed to take advantage of emerging opportunities and to weather global economic storms. An integral part of the reform agenda has been the sustained liberalisation of trade barriers and reduced industry protection. Throughout the 1970s, 80s, 90s and over the last decade, Australia has embarked upon unilateral, bilateral and multilateral trade liberalisation. This report updates a 2009 that quantified the economic impacts of Australian merchandise trade liberalisation over the 20 year period between 1988 and 2008. This report, as did the previous, uses economic modelling to simulate the economic impact of Australian merchandise trade liberalisation. This time, however, a 30 year trade liberalisation window (1986–2016) has been considered. Importantly, the economic modelling has only taken Australian merchandise trade liberalisation into account — the modelling excludes Australian services and investment liberalisation, and any trade liberalisation undertaken by Australia’s trading partners. As such, the economic modelling results can be seen as representing the minimum of what has resulted from Australia’s overall process of trade and investment liberalisation over the past 30 years. Trade is an important element of the Australian economy and accounts for 1 in 5 jobs Trade liberalisation undertaken by Australia over the period 1986 to 2016 has seen Australia become more integrated into the global economy and more trade orientated, with trade growing faster than nominal GDP over the period. In 2016, merchandise trade was equivalent to nearly 31 per cent of nominal GDP, up from 26 per cent in 1986. Overall goods and service trade was even larger, at just under 40 per cent of nominal GDP in 2016. Trade is also important to the Australian labour market. Using the latest input-output tables from the national accounts, it is estimated that around one in five Australian workers, or 2.2 million people, are employed in a trade-related activity. This includes workers in heavily export-focused industries like agriculture, minerals and energy, but also, importantly,
cie-report-trade-liberalisation.docx