Australia delivered 12 monthly trade surpluses in 2018, and 22 in the last 24 months. 2018 was also the first calendar year since 1972 where every month was in surplus. That is the first time in 46 years.
Increased resource exports including metal ores and minerals (A$94.9 billion) and coal, coke and briquettes (A$66.7 billion), along with rural goods such as meat (A$13.6 billion) and cereals (A$7.3 billion) helped contribute to Australia’s strong 2018 result.
However, the nation’s particularly high December 2018 trade surplus was largely due to a significant drop in the value of imports. Australian Bureau of Statistics data indicates that imports fell by 5.7 percent to $34 billion in seasonally adjusted terms, the largest decline on record.
China remained Australia‘s top trading partner, a position it has held since 2009. Two-way merchandise trade with China was valued at A$192.1 billion, or 29 percent of Australia‘s total merchandise trade. Increases in merchandise exports were recorded with nearly all the nation’s key trading partners.
Minister for Trade, Tourism and Investment Simon Birmingham said Australia continues to benefit from free trade agreements. The latest round of tariff cuts under trade agreements with China and South Korea, effective January 1, are expected to build on the substantial economic benefits these two major agreements had already delivered for Australian exporters.
“China and Korea are two of our largest trading partners, and these tariff reductions will provide a significant boost for Australian businesses looking for export opportunities into these markets,” Birmingham said. “For example, tariffs on Australian bottled wine exports to China have now been eliminated, unlocking further opportunities for our winemakers, whilst tariffs on a range of other exports including rock lobsters, shampoo, tomato sauce and cherries have also been eliminated.
The Trans- Pacific Partnership (TPP-11) Agreement took effect late last year. It is one of the most comprehensive and ambitious trade agreements ever concluded and eliminates more than 98 percent of tariffs for Australia in a trade zone worth A$13.8 trillion in GDP and a market of around 500 million consumers. Independent modelling shows Australia is forecast to see A$15.6 billion in net annual benefits to national income by 2030 from the TPP-11, which also involves Australia’s first trade agreement with Canada and Mexico. It will eliminate or substantially lower tariffs on many of Australia’s key goods exports including wine, beef, dairy, wheat, sugar, and manufactured goods such as leather products, paper and medical equipment.
In January, Australia and the U.K. signed a new bilateral Wine Agreement and Mutual Recognition Agreement to help ensure the continued flow of trade post-Brexit. Minister for Trade, Tourism and Investment Simon Birmingham said these agreements would ensure arrangements already in place between Australia and the European Union for Australia‘s wine and other exports continued to apply for the U.K. post-Brexit. Nearly a third of Australia‘s exported wine went to the U.K. last year.