Business

Australia encouraged to focus on trade with China, India: report

Australia encouraged to focus on trade with China, India: report

Australia needs to focus on trade opportunities with China and India rather than being derailed by nerves about the rise of protectionism in the United States and Britain, according to a report released today.

The Committee for Economic Development of Australia (CEDA) cites the protectionist policies of US President Donald Trump and the UK vote to leave the European Union, as two key factors clouding potential deals with key emerging markets.

But in its Outward Investment report, CEDA’s policy committee chairman, Professor Rodney Maddock said Australia was over-emphasising traditional trade with the US, UK and New Zealand at the expense of deals China and India.

“The amount that flows to China and India only accounts for 2.9 per cent of Australia’s total outbound investment,” Professor Maddock said.

“With concern about trade barriers stemming from Brexit and the Trump presidency, Australia should focus on engagement with its immediate region where growth opportunities are substantial.”

CEDA estimates that Australian investment in traditional partners like the US and UK is valued at more than $540 billion a year.

But the report said there was a major opportunity for Australia to be a premium food provider to Asia and recommended setting up “food processing clusters” to speed integration into Asia markets.

“There is a significant opportunity for Australian outbound investment in distribution systems for chilled and fresh foods in Asia, which remain poor,” Professor Maddock said.

The report also urged the Federal Government to “better articulate” the benefits of outward investment, especially with the emerging economies of China and India.

“There are significant emerging markets with an exploding middle-class, demanding higher quality products and services. This represents a huge opportunity for Australia,” Professor Maddock said.

Protectionism not encouraged

The report cautioned against moves to adopt protectionist policies in Australia and that rather than protecting local jobs, isolationism posed a risk to living standards.

Professor Maddock said that outbound investment was often viewed negatively — as local companies off-shoring jobs to cut costs in a high-wage economy.

“In reality, [offshore investment] can deliver significant economic benefits to the Australian economy and in fact create jobs both here in Australia and abroad,” Professor Maddock said.

“The lifting of trade barriers and integration of Australia into the global market-place has resulted in the biggest increase in our living standards in our history.”

CEDA also saw Australia’s taxation system as a potential barrier to investment and urged the Productivity Commission to find solutions.

“There have been conflicting views on whether the Australian taxation system is biased against outbound investment,” Professor Maddock said.

The CEDA report comes as the Federal Government works to strike bilateral free trade agreements, after President Trump torpedoed the Trans-Pacific Partnership shortly after his inauguration.

Online Source: abc.net.au

More in Business

Analysis reveals possible financial motivation for Adani’s Carmichael coal mine

Analysis reveals possible financial motivation for Adani’s Carmichael coal mine

The Indian TelegraphOctober 3, 2017
National Skills Week 2017: Vocational training is the first step for many creative careers

National Skills Week 2017: Vocational training is the first step for many creative careers

The Indian TelegraphAugust 26, 2017
Fears of Chinese exodus from Sydney property market

Fears of Chinese exodus from Sydney property market

The Indian TelegraphAugust 18, 2017
Young workers underpaid, working in unsafe conditions: Unions ACT report

Young workers underpaid, working in unsafe conditions: Unions ACT report

The Indian TelegraphAugust 14, 2017
Rick Otton and We Buy Houses engaged in misleading conduct with book ‘How to Buy a House for $1’

Rick Otton and We Buy Houses engaged in misleading conduct with book ‘How to Buy a House for $1’

The Indian TelegraphAugust 12, 2017
Australian dollar stung by RBA's interest rate comments

Australian dollar stung by RBA’s interest rate comments

The Indian TelegraphJuly 21, 2017
Pay drop for thousands of workers as Sunday penalty rate cuts kick in

Pay drop for thousands of workers as Sunday penalty rate cuts kick in

The Indian TelegraphJuly 3, 2017
Minister for Trade, Tourism and Investment - Australian Businesses Tap In To India

Minister for Trade, Tourism and Investment – Australian Businesses Tap In To India

The Indian TelegraphJune 19, 2017
Minimum wage increases to $18.29 an hour, cuts to Sunday penalty rates to still go ahead

Minimum wage increases to $18.29 an hour, cuts to Sunday penalty rates to still go ahead

The Indian TelegraphJune 6, 2017
India rejects Australian request to join naval war games

India rejects Australian request to join naval war games

The Indian TelegraphJune 1, 2017
India and Australia: Why the two countries such close business partners

India and Australia: Why the two countries such close business partners

The Indian TelegraphMay 29, 2017
Senate hearing descends into chaos: ‘You are a tyrant and dictator’

Senate hearing descends into chaos: ‘You are a tyrant and dictator’

The Indian TelegraphMay 25, 2017
Banks angry at having to sign confidentiality agreement on levy

Banks angry at having to sign confidentiality agreement on levy

The Indian TelegraphMay 22, 2017
Treasurer Scott Morrison insists major banks sign confidentiality agreements on the $6.2 billion levy

Treasurer Scott Morrison insists major banks sign confidentiality agreements on the $6.2 billion levy

The Indian TelegraphMay 17, 2017
Newspoll: Prime Minister Malcolm Turnbull’s budget gamble falls flat

Newspoll: Prime Minister Malcolm Turnbull’s budget gamble falls flat

The Indian TelegraphMay 15, 2017
Opal card fares to rise from 3 July

Opal card fares to rise from 3 July

The Indian TelegraphMay 15, 2017
Amazon to undercut local retailers by 15 per cent

Amazon to undercut local retailers by 15 per cent

The Indian TelegraphMay 11, 2017
Govt to standardise allowances across overseas public servant agencies

Govt to standardise allowances across overseas public servant agencies

The Indian TelegraphMay 11, 2017
Flight Fights: The rise and fall of the irate passenger

Flight Fights: The rise and fall of the irate passenger

The Indian TelegraphMay 8, 2017
Prime minister says IS fighter’s son can return to Australia

Prime minister says IS fighter’s son can return to Australia

The Indian TelegraphMay 8, 2017
Australian Federal Police admits to metadata breach involving a journalist

Australian Federal Police admits to metadata breach involving a journalist

The Indian TelegraphMay 1, 2017