Access to goods and services

‍The vast and growing body of human knowledge has spurred technological innovation and created products and services unimagined 100 years ago. Wifi, solar panels, organ transplant procedures, and satellites are technologies Australians today take for granted. The level of expertise, specialisation and investment required to produce many common goods, however, means Australians are often notable to produce these goods alone.
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For goods that we have the expertise to produce, it can be cheaper for them to be produced in countries with larger and technically experienced work forces.Or we might prefer to buy goods that have different qualities to those we make in Australia.
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Many countries rely on Australia for mineral and energy products, food and agricultural goods, education and professional services. Similarly, we rely on other countries for cars and pharmaceuticals, airplanes, coffee machines, tractors and clothes.
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International trade enables Australians to access goods and services that:can’t be produced in Australia; are too expensive to produce domestically; that were first developed overseas; that Australians don’t want to produce; or are still waiting for an entrepreneur to produce bigger and better Australian versions!
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The Australian way of life would look very different if we were closed to international trade and investment.

Access to larger pools of capital

‍International investment provides the capital needed to fund new and growing businesses in Australia.

It means Australians wanting to launch projects or expand their business have a bigger pool of funds, with a broader set of investment conditions, to choose from, enabling them to select the investor best suited to their project or business. International investment can also help Australians access new technology, new markets, and new staff with specialist expertise.
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International investment equally provides Australians with a vast array of global investment options for increasing their income. It provides an avenue for Australians to share their expertise, their ideas and their resources for the benefit of both Australia and the countries in which we invest.
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Like trade, however, international investment must be conducted with in enforceable rules that protect the public good. There are too many examples in recent history of countries and companies exploiting vulnerable people for financial gain.

New ideas

‍International trade and investment also gives us access to new ideas, new art forms, and new ways of doing things.
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We live in a world of people confronting many of the same challenges Australians face in their day to day lives. International trade and investment provide channels through which we can access new ideas and ways of overcoming common challenges. Whether that is individuals with good ideas, or research teams in universities that commercialise their work, the mechanism through which most Australians access ideas conceived overseas are international trade and investment.

Innovation and productivity

‍The access Australians enjoy to new goods, services, ideas and capital, because we are open to international trade and investment, promotes innovation and productivity within Australia. Australians use new products in their own homes and workplaces to make it easier or quicker to do tasks, to improve our health and wellbeing, or improve our environment. We adopt, adapt, alter and build on the new products, services and ideas we import. In the same way the world has adopted wifi, the electric drill, and plastic bank notes all first developed in Australia to use in homes, workplaces and communities in multiple countries.

The two-way process of learning from, adapting and building on products, services and ideas developed overseas spurs our own innovation and helps us do our tasks in new and improved ways.

Income and economic growth

‍Some identify the principal benefit of trade and investment as generating income for Australia. They highlight the importance of a trade surplus – when we sell more to overseas customers than we buy – to bolstering Australia’s wealth.Trade and investment does directly contribute to Australia’s wealth. We sometimes run trade surpluses in the billions of dollars that provide income toAustralian businesses and their employees that gets spent at local shops, on paying mortgages and other daily expenses.This income also goes to taxes government collects to spend on services such as hospitals, roads and schools. In the March quarter this year, Australia had a$19.2 billion trade surplus, probably one of the largest in Australia’s recent history.

Australia also runs trade deficits when we buy more from overseas then we sell. It’s not helpful to think of trade surpluses and deficits as ‘good’ or ‘bad’.Imports of goods and services that help businesses grow, be more productive, employ more people, or provide new goods and services that improve people’s lives can make a positive contribution to your life and Australian society as a whole. The fact that we buy more than we sell in any particular period is not necessarily bad for Australia. It can actually make us better off in the long term depending on what we buy, how we use it and how it is balanced out by other international financial transactions.More important than the surplus dollars that can be generated by trade is the sum of the positive contribution international trade and investment make to theAustralian way of life. That is the sum of: our access to new goods, services, ideas and capital that are not available within Australia; the contribution of international trade and investment to innovation and productivity in Australia; and the income generated from both increased productivity as well as exportdollars. Together these make up an important component of Australia’s overall economic growth.

Australia’s economic resilience

‍Australia’s openness to international trade and investment strengthens our economic resilience – our ability to respond to and bounce back from shocks.
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You could think of it as being ‘work fit’. Imagine a busy workplace that requires you to deal with lots of tasks and different people, where you tend more to be reacting to new requests and unexpected developments than progressing through a list of planned jobs. Compare this with a quiet work place where you can pretty much plan out your week of jobs and get them done. When crazy, unexpected things happen it’s more likely those in the busywork place will be better able to respond because they’re used to reacting.It’s not that they are innately better at dealing with the unexpected – it’s just they’re used to it.
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When Australian businesses trade and invest internationally they have to manage multiple time zones, different currencies, difference legal systems, different cultures, different regulatory bodies, different paperwork, different accounting and reporting systems, different labelling requirements, different marketing standards and the list goes on. They need to be practised at dealing with all of these differences on top of what their Australian business requires.
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As a country that is open to international trade and investment – open to global markets where technology, consumer and industry trends, and political and social issues are constantly changing – we tend to be better prepared for the unexpected and able to bounce back more quickly.
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The jury is out on how we will recover from COVID. Australia’s openness to international markets, customers, different cultures and the constant change that goes with it bodes well.