ESTABLISHED, MATURE MARKETS WITH DIVERSIFIED OPPORTUNITIES
Australia and New Zealand are both highly developed, internationally competitive, advanced market economies. Australia’s economy ranks 13th in the world by nominal GDP. In addition, Australia is the sixth-largest country by land mass, covering roughly the same area as the lower 48 U.S. states.
New Zealand ranks 50th among global economies, similar in economic output to Portugal and Peru, and is the sixth-largest island country by land mass, falling between the UK and the Philippines. It regularly ranks first in the world for ease of doing business, according to the World Bank.
Australia and New Zealand are both open market economies with minimal restrictions on the import of goods and services—factors that have increased productivity, stimulated growth, and made both economies more flexible and dynamic. In addition, these countries had the world-leading response to the pandemic; low infection and death rates combined with strong economic stimulus and management have made this region a premier global destination for exporters. Due to these considerations, Australia and New Zealand should be included in Wisconsin companies’ export growth strategies.
The Wisconsin Economic Development Corporation (WEDC) is organizing a virtual Global Trade Venture to Australia and New Zealand from Nov. 7-11, 2022, to help Wisconsin companies connect with export partners in these markets.
Offered for the first time during the pandemic, virtual Global Trade Ventures provide an opportunity for Wisconsin exporters to connect and engage in conversation with potential export partners in markets across the world—without the time and expense involved with traveling to a market in person. Participants benefit from the firsthand knowledge of Wisconsin’s in-market trade representatives, receiving market intelligence customized for their company and product/service offerings. One-on-one meetings are arranged based on each company’s specific needs; all participants need to do is show up ready to make their pitch and ask questions to determine if the potential partner is a good fit.
Companies do not need to have prior export experience in order to benefit from this trade venture. Whether companies are new to these markets or are looking to expand their presence there, they are invited and encouraged to participate in this trade venture, as long as they view exporting as an integral part of their overall corporate growth strategy.
The U.S. and Australia maintain a robust trading relationship underpinned by shared democratic values, common interests and cultural affinities. Economic, academic and people-to-people ties are vibrant and strong. Australia is a highly receptive, open and transparent market for U.S. products and services, with Australian imports from the U.S. totaling $26.6 billion in 2021 (second only to China among Australia’s import sources). U.S. exports to Australia have more than doubled since the U.S.-Australia Free Trade Agreement took effect in 2005. Australia ranks in the top 10 destinations for Wisconsin exports, having received just over $600 million in exports from Wisconsin in 2021.
Australia’s economy grew by 6% in 2021 after a slight contraction (.3%) in 2020, and 4.2% growth is projected for the current year. Australia has remained an appealing and profitable market for Wisconsin companies for many years. It offers very few barriers to entry, a familiar legal and corporate framework, and a sophisticated yet straightforward business culture. Although it is important to understand and appreciate Australia’s cultural differences—and a country briefing offered as part of the Global Trade Venture will cover this topic—it is also an ideal market for new-to-export companies, as well as those seeking to further expand their business/distribution networks in country. Australia is a market that seeks innovative, advanced technology product and service solutions. Wisconsin companies will find it to be a friendly market with many potential buyers for their products and services—especially if they offer innovations that solve problems for companies in their respective sectors.
NEW ZEALAND OUTLOOK
New Zealand is a wealthy, sophisticated market with a highly transparent and open business environment, undergirded by a stable democratic system. The country consistently ranks high in measures of business honesty and integrity—attributes that make it an appealing market in spite of its small size. New Zealand’s economy is highly dependent on international trade, with commodity exports and tourism making up a major share. The U.S. is New Zealand’s third-leading trading partner, after China and Australia (parties with which New Zealand has free trade agreements). In 2021, imports from the U.S. totaled $4.3 billion. Key categories of exports to New Zealand include aircraft and parts, agricultural machinery, and medical and pharmaceutical products. There is room for growth in Wisconsin’s exports to New Zealand, which totaled nearly $91 million in 2021 (down from $122 million annually before the pandemic). After contracting by 7% in 2020, New Zealand’s economy logged 6% growth in 2021, and 3.2% growth is projected for 2022.
MAKING BUSINESS CONNECTIONS VIRTUALLY
In addition to a customized meeting schedule, each participant in the trade venture will receive a market assessment for Australia and New Zealand, detailing considerations to keep in mind when introducing their product or service into these markets. WEDC has eyes and ears on the ground, in the form of Wisconsin’s in-market authorized trade representatives—thus making it easier for Wisconsin companies to find local partners they can trust, taking some of the guesswork out of launching in a new market or growing exports within the market. With all your appointments arranged for you, you can focus on business rather than logistics and scheduling. Because of the time difference, meetings will be held at times that are the afternoon in Wisconsin and the morning in Australia and New Zealand.
While companies in many different sectors will find opportunities in these markets, companies in the following sectors are especially encouraged to participate:
- Life sciences and health care. Australia’s health care expenditure as a percentage of GDP is expected to double over the next 50 years. Elder care in particular is a priority, with Australia’s elderly population expected to double by 2057. What’s more, 80% of medical devices and diagnostics used in Australia are imported. In the current year’s budget alone, Australia’s government has committed to spend $85 billion USD to boost health infrastructure, resources and support; New South Wales province is spending $7 billion USD on health infrastructure, including upgrades to 40 hospitals.
- Advanced manufacturing. Australia’s government has committed over $1 billion USD to a Modern Manufacturing Strategy, with several funding opportunities available for businesses. In addition, the government has established the Advanced Manufacturing Growth Centres to drive innovation, productivity and competitiveness in the industry. Manufacturing priority sectors include aerospace, defense, medical products, critical minerals and resource technology, food and beverage processing, recycling and clean energy.
- This industry adds the equivalent of $1.4 billion USD to Australia’s economy. Australia is the world’s fifth-leading user of shipping services, and 10% of the world’s sea trade passes through Australian ports. Over 95% of Australia’s exports are transported by sea. With pandemic-related disruptions in supply chains, there is increased demand for emerging technologies in automation, digitization and e-navigation. In addition, the Australian government is embarking on a naval defense rebuilding program that includes $35 billion USD for submarines, $18 billion USD for frigates, $447 million USD for oilers and $244 million USD for patrol boats.
- Consumer goods. Australia’s retail market for consumer goods is worth an estimated $148 billion USD, with its growth being driven by rising incomes as well as the growth of online shopping and the rise of multichannel sales platforms. Australians spent the equivalent of $36 billion USD shopping online in 2020, a 57% increase from 2019. Australia’s is the 11th-largest e-commerce market in the world; leading platforms include eBay, Amazon, Gumtree and kogan.com.
- Agricultural technology and agribusiness. Agriculture is New Zealand’s largest industry, and the country is the world’s leading exporter of dairy products and sheep meat. Growing consumer demand for New Zealand’s agricultural exports has led to increased demand for agricultural equipment in the market. New Zealand’s tractor and farm machinery sector is worth an estimated $800 million USD annually, and the government is working to boost primary sector export earnings by the equivalent of $28 billion USD over the next decade.
- Information and communications technology. Technology is Australia’s sixth-largest industry, contributing the equivalent of $85 billion USD to the economy each year, and it’s estimated that the tech sector could add another $35 billion to that value annually if Australia matched the performance of global leaders in the technology space. Banking, finance and insurance currently make up the largest portion of ICT spending in Australia; key areas for growth include digital health, artificial intelligence, agricultural technology, cybersecurity and smart cities.