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Oct 2016
Wed, 05 Oct 2016

Insights from the DHL Export Barometer

Article by Andreas Battocchio
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Australian export confidence increases for the U.S. and support for Free Trade Agreements grows, as exporters see positive effects on business. But what does this mean for AmCham and it members?

DHL recently released the 2016 edition of the DHL Export Barometer, which included a specific focus on e-commerce and the digital revolution. The annual survey measures confidence among Australian exporters and aims to identify export trends, which this year generated some interesting findings.

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Generally, two findings in the report stood out for AmCham members and organisations currently exporting, or considering exporting, to the United States:

1) General export confidence remained relatively stable compared to last year and is down only 1%, to 65%, still markedly higher than in 2011, when only 48% of exporters expected orders from overseas to increase in the following year.

More interesting, though, is the striking increase in export confidence for North America. 59% of exporters expected orders from the U.S. to grow over the following 12 months, a solid 4% increase from last year’s 55%.

2) The Export Barometer reveals increasing support for Australia’s Free Trade Agreements (FTAs) among exporting businesses. Support for the Australia-US FTA (AUSFTA) increased, as 59% of exporters now see a positive impact of the agreement on their actual business. The Trans-Pacific Partnership (TPP) is steadily gaining more support among industry professionals as well, with 47% of exporters viewing it as a positive development this year, up from only 37% in 2014.

 

But what does this mean for AmCham and its members? And why is it important?

1. Increase in export confidence

The strong increase in exporter confidence for the U.S, despite populist economic pressure in the country, reflects the country’s continued economic recovery over the past few years.  It also reflects the growing demand for Australian goods in the US and emphasises the opportunities that are available in American markets for Australian companies.

The well-established trade relations between our two countries, the comparatively stable and predictable political and economic environment in the US and the relative ease of access to the American market in comparison to alternative markets only serve as extra encouragement for Australian exporters.

The success of Stimulating Trade to the US, a panel event organised by the GWS chapter of AmCham in Parramatta on 21st September 2016, emphasises the interest local companies and entrepreneurs have in exporting to the US. Many of the attendees represented small or medium-sized organisations, several of them with limited or no practical exporting experience.

This is where AmCham plays an important role. We can offer assistance to members who don’t have easy access to the required information or specific experience. AmCham provides support for members looking to export, through facilitating worthwhile connections and organising similar informative events for our members and prospective members throughout the country.

Members can not only learn from expert presenters, but can also leverage the unrivalled networking platform these events provide, as well as the opportunity to learn from the experiences of their peers. AmCham is the hub guiding members to the right people and organisations from across our extensive network.

2. Increased support for FTAs

A second important takeaway from the Export barometer is the increased support for FTAs. As time passes, more and more exporters indicate that they see positive effects on their actual business. These are not just expected benefits, but tangible impacts on the business of exporters.

A model-based analysis on the effect of FTAs on trade in agricultural products by the Rural Industries Research and Development Corporation produces similarly positive results, finding a significant positive effect on Australian exports. A study in the Journal of International Economics supports the importance of FTAs, finding that bilateral FTAs double its members’ bilateral trade after 10 years.

This shows why support for the TPP is rising among industry professionals, and why it is so important for members of AmCham that the TPP is ratified this year. For more on why the TPP is such a critical cornerstone of doing business in the twenty-first century in the Asia-Pacific, see the USTR’s breakdown of the agreement and DFAT’s analysis of expected TPP outcomes.

Because of its significant impact on Australian trade, AmCham will continue to dedicate attention and resources to supporting TPP and advocating for its ratification by the US Congress during their ‘lame duck session’ after the election on November 8. In fact, AmCham will make that case directly to members of Congress in December, when we take a delegation to Washington DC to lobby for a vote on TPP before the end of 2016.

Current efforts, such as AmCham’s submission to the Senate’s Standing Committee on Foreign Affairs, Defence and Trade or various posts on the news section of our website are all part of a continued effort to convince global business leaders to speak up in favour of TPP.

Article by Andreas Battocchio, AmCham Intern

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