Executive summary

  • The Australian-US Free Trade Agreement (AUSFTA) has undoubtedly enhanced the alliance relationship between Australia and the US through economic integration.
  • Whilst China and India increasingly look to Australia for investment options, the US continues to be the largest foreign investor in Australia in a range of sectors.
  • Since the 1980s and the internationalising of the Australian economy, Australian companies have sought to invest in the US as their preferred destination.

The AUSFTA was designed to promote both economic and political interests by increasing the investment flows between the two countries and liberalising trade. Nearly a decade after implementation the expansion of both imports and investments led by the resource boom has driven the Australian economy to new levels of prosperity. The Agreement has offered further opportunity for closer economic integration through harmonisation of standards and increased migration of professionals between the countries. Despite these achievements, the AUSFTA has delivered a mixed overall outcome for Australia - chiefly due to larger macroeconomic forces including the Global Financial Crisis. Against the background of ongoing Trans-Pacific Partnership negotiations that exclude China as well as Regional Comprehensive Economic Partnership negotiations that exclude the US, Australia must continue to work with both sides of the Pacific to prioritise economic cooperation. As de-territorialisation becomes more evident in global production, inclusive regional economic agreements will support continued regional stability.