Australia has a bigger investment share in Pacific Island nations, but many companies, such as Westpac, aren’t debating whether to put more money in, but whether to pull out, because the small returns are increasingly overwhelmed by regulatory complexities. (Westpac is also pulling back, for different reasons, from Asia.)
Last week, Australian Prime Minister Anthony Albanese, who was on a 4-day official visit to India, said the Economic Cooperation and Trade Agreement (ECTA) signed between the two countries is a transformative agreement, which will unlock the next level of potential in trade and investment.
Addressing the India-Australia CEO forum in Mumbai on Thursday, Albanese expressed his sincere appreciation for the large turnout of Australian investors that came to India as well as for the key Indian business houses that participated in the event.
He added that the delegation of Australian investors is one of the most serious and high-profile ones to have visited India from Down Under.
The Australian PM also voiced optimism about the complementarities between both nations, saying that this juncture is a turning point in accelerating economic cooperation and mutual benefits in the relationship between the two countries.
In the fiscal year 2022, India was Australia's 9th largest trading partner. Major exports to Australia include petroleum products, textiles and apparel, engineering goods, leather, pearls, mechanical appliances, iron and steel and gems and jewellery. Major imports include edibles, dyeing extracts, chemicals, wool, minerals and precious stones.
As South-East Asian nations – most notably our neighbour and regional giant, Indonesia – are focusing their diplomatic energies on recharging economic growth, Australia’s regional standing could drift.
In Indonesia, Australia made up 1.7 per cent of cumulative capital investment into the country between 2012 and 2021, according to the Lowy Institute’s Asia Power Index. In the Philippines, it is about the same. In Malaysia, it is slightly higher.
In Vietnam, it is 0.52 per cent. Australia’s stock of investment is less than that of Lego, the Danish toy and games company, in the country.
Two-way trade between Vietnam and Australia enjoyed a record year-on-year growth of 26.91% to 15.7 billion USD in 2022, according to the Vietnam Trade Office in Australia.
Vietnam’s export turnover to Australia last year expanded 26.18% year-on-year to 5.55 billion USD while its imports were valued at 10.14 billion USD, an increase of 27.31%.
Data from the office shows that many key exports of Vietnam continue to post high growth amid various challenges, including machinery, equipment, tools, and other spare parts (62.1%); footwear (41.3%); textiles (26.3%); aquatic products (37.3%); iron and steel (102.9%); handbags, suitcases and umbrellas (24.8%); coffee (62.53%); and electric wires and cables (81.2%).
Last year, the bilateral trade goals were achieved quickly, he said, adding that Vietnam has become Australia's 10th largest trade partner for the first time, while Australia is now Vietnam's 7th largest trade partner.
Economic experts say that there is a great room for Vietnam and Australia to promote trade growth. The implementation of free trade agreements, including the ASEAN-Australia-New Zealand Free Trade Agreement (AANFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), offer opportunities for further cooperation between the two countries.
This year, the Vietnam Trade Office in Australia plans to implement promotion programmes for industries with large turnover and follows the directions of the Ministry of Industry and Trade in expanding the Vietnamese imports and exports.
