Overseas Trade The Life Force For Australia

Press, Volume CVIII, Issue 31758, 15 August 1968, Page 9

Overseas Trade The Life Force For Australia

Australia lives and grows by overseas trade. It takes its place among the first 12 trading nations. Its goods are exported to countries in all parts of the world.

Primary industries in Australia were developed to produce large export surpluses of food and raw materials, principally for the big centres of population in Britain and other European countries.

The wool cheques and the money earned from the sale of wheat, fruit and other major primary products paid for essential imports of manufactured goods, machinery’ and the raw materials and fuels that had still to be found in Australia.

This remains as true today as in the past, with the essential difference that Australia itself is now a manufacturing country and also produces most of its own raw materials.

A high rate of economic growth. with continued expansion of industry to absorb the growing population, is essential in the present stage of Australia’s development. "eal Gross National Product has been increasing by more than 4 per cent a year. To enable this growth to continue. Australia must keep up the inflow of imports required by its manufacturing industries and it must continue to build up exports to earn the foreig- exchange to pay for them. Some authorities estimate that exports must grow by 6 per cent a year.

To an increasing extent, Australia’s main imports consist of specialised capital equipment for its expanding industries, producers’ raw materials and fuel. The new and developing i’‘" , ustries have set up a strong demand for imports of this kind.

Main Burden Of the 1964-65 import bill of 52900 million, about 80 per cent was for buying goods to meet the needs of industry, transport and development.

- of the companies formed in - Australia by overseas interI ests in the past decade or so,

on the farm industries and to a growing extent on the various mineral producing industries.

Primary industries are responsible for supplying 85 per cent of all Australian exports, in natural or processed form Wool alone earns o 5 per cent of the country’s overseas income.

Australia provided about half of the total world exports of wool and is among the first three exporters of lead, zinc, wheat and flour, meat, butter and sugar. The nation’s reliance on these big exporting industries has inevitably exposed the economy to the effects of their changing fortunes on overseas markets.

Major price fluctuations on world markets not only hit the domestic economy but also affect the country’s ability to pay for its imports. The growth of manufacturing industries since World War II has given greater strength and diversity to the economy. Australia is now in a better position to withstand the effects of setbacks on overseas markets. New Industries The new manufacturing industries have also become a force in overseas trade. Despite the profitability of the home markets, many more local manufacturers with Government encouragement, are taking up the less familiar challenges of export markets. They are scoring some notable successes, often in keenly competitive markets. Among the leaders in the drive for exports are some

The main burden of earnthe necessary foreign exchange has continued to fall

though not all overseas principals have given their subsidiaries freedom of action in the export field.

Australian manufactured products now being marketed abroad include motor cars and trucks, farm machinery, refined petroleum products, steel, and a variety of factory commodities. World Trade The value of manufactured exports has grown to about 11 per cent of all exports. However, in terms of world trade the total is still relatively insignificant—and there is obviously a great opportunity for Australian industrialists to go out and sell. A study of Australia’s export potential was made in 1964 by the recently-formed Committee for Economic Development of Australia, a body supported by leading industrial and business concerns.

It concluded that potential markets for Australian manufacturers were “virtually limitless,” but whether Australia could increase its share of the markets must ultimately depend on the ability of the manufacturing sector to produce and deliver goods at competitive prices. The committee argued that manufacturers should concentrate on producing goods in

which they had the technological edge or price advantage.

Export Prospects

Australia is considered to be in a good position to benefit from rising world consumption of metallic minerals resulting from the drive for increased industrialisation, both in developed and developing countries. Export prospects have undoubtedly beer a prime incentive in plans of the powerful mining groups formed recently to exploit new iron ore and bauxite deposits. Higher output of copper and expansion of smelting and refining industries, too, have been inspired by export objectives as well as expanding local needs. Exports of primary mineral products (excluding gold and uranium) are worth about $166,600,000 a year. It is estimated that this figure will reach between $270 and $2BO million by 1970. Future Market Japan was regarded as the most promising future market for : ustralian basic metals, alumina, iron ore and coking coal. A radical change in the direction of Australia's overseas trade in recent years has swung it increasingly towards Japan, New Zealand and South-East Asia. The most obvious effect of this change has been to lessen Australia’s traditional dependence on the British market. About half of Aus-

tralia’s total exports went to Britain before the Second World War; this proportion has declined recently to about one-fifth. Britain, nevertheless, was still Australia’s biggest single customer in 1964-65, with exports worth $515 million. It also remained Australia’s principal market for such important commodities as butter and cheese, canned fresh and dried fruits, mutton and lamb, and silver a n d lead. Second Place But Japan in that year had risen to second place among Australia's customers with purchases only $73 million short of the total for Britain. Britain has also continued to be the main source of Australia’s imports, with a total of $761 million in 1964-5. The United States was the next largest supplier of imports, with a total of $692 million.

However, Australia’s imports from Japan were rising faster than those from any other major supplying country. They were up by over 50 per cent in 1964-5 to $260 million and in five years have more than trebled. Despite Australia’s close ties of race and sentiment with Britain, the realities of geography-are clear and Australia sees itself as part of the ever-changing and fastdeveloping Asian region. In many ways it has demonstrated its will to aid and share in the development of neighbouring nations. Two-way Trade In particular, there has been a substantial expansion of two-way trade, with a third of Australia’s exports going to Asia today compared with 12.5 per cent in 1950-51. Indications were that this trend in trading would continue.

Trade with Japan has soared since the signing of a trade treaty between the two countries in 1957. Japan has replaced Britain as the largest single customer for Australian wool. In 1964-5 its greasy wool purchases were worth $240 million and represented about 30 per cent of all Australian greasy wool exports.