Two-way trade between the United States and Australia will help the economies of both countries as they grapple with a post-coronavirus world, a new report suggests.
The report – commissioned by the American Chamber of Commerce in Australia – found seven per cent of Australia’s GDP was the direct result of US trade and investment in 2019, adding $131 billion into the economy.
US investment in Australia accounted for more than a quarter of all foreign investment – making the US the biggest source of foreign investment.
The US also invested 40 per cent more in Australia than it invested in China, with half of that flowing into mining and manufacturing and the remainder supporting professional services, finance, wholesale and retail.
AmCham chair Brendan Nelson says Australia-US trade will be essential for economic prosperity in the post-COVID-19 environment.
‘Both Australia and the United States, their businesses, industries and investors need one another more than ever,’ Dr Nelson said in the report.
‘Two-way trade and investment are essential to recovery.’
The AmCham-commissioned report follows a United States Studies Centre report last week which found the value of two-way foreign investment between the US and Australia has reached $1.82 trillion.
That is equivalent to about 90 per cent of the value of the entire Australian share market and 10 times larger than Australia’s bilateral investment relationship with China.
The USSC study found more than 2000 American companies employed 272,000 workers in Australia, with an economic value of $71.6 billion.
A YouGov poll for the USSC of 1054 Australians found just 17 per cent correctly identified the US as the largest source of foreign investment.
More than 70 per cent believe China is number one, despite it having never overtaken the US.
US Ambassador to Australia Arthur Culvahouse Jr said American businesses trusted Australia’s ‘transparent and accountable legal and regulatory systems’.
‘We have faith in each other’s free flow of knowledge, people and capital, our respect for human rights, our strong democratic systems and our respect for intellectual property,’ he said at a launch of the report in Sydney.
In a thinly-veiled swipe at recent trade tensions between Beijing and Canberra, which has included tariffs on Australian barley and bans on Australian beef exporters, Mr Culvahouse said some trade transactions come with ‘hidden costs’.
The Chinese ambassador to Australia, Cheng Jingye, in April also warned the Chinese public might boycott Australian goods if the smaller nation didn’t drop its pursuit of an independent coronavirus inquiry.
‘Recent events have shown starkly that economic security is national security,’ Mr Culvahouse said.
‘It’s not just about the money – it’s about who you trust, it’s about shared values, it’s about 100 years of mateship.
‘Australia will never see the day when a United States ambassador threatens to withdraw from trading with and investing in Australia.’