Simon, the 2017 figures on Australia’s international trade came out just a few weeks ago. What are the stand-out Queensland trends in those figures?
Well, Queensland exports had a record year last year. The value of Queensland goods exports increased $14.3 billion to be $69.6 billion over the year to December 2017, led by higher coal prices and increased gas production.
And on 19 February, the Australian Government confirmed Queensland as the nation’s second largest exporter in 2016–17, behind Western Australia and just ahead of New South Wales.
Now, the Commonwealth Games will come to the Gold Coast in April, and we know that the Commonwealth reps will be talking trade as well as sport. What do the 2017 trade figures tell us about trade between Queensland and the other 52 Commonwealth countries?
You’re right — the Games will be a fantastic opportunity to showcase Queensland to the Commonwealth countries, which are home to 2.4 billion of the world’s most diverse peoples. The Trade 2018 business program will run alongside the Games.
As far as the stats go, Queensland’s goods exports to Commonwealth nations totalled $15.8 billion in 2017, collectively representing Queensland’s second largest export market after China.
Interestingly, according to the Commonwealth Secretariat, Commonwealth countries, on average, tend to trade around 20% more and generate 10% more investment with each other than with countries outside of the Commonwealth. The so called ‘Commonwealth effect’ also shows up as a benefit in trade costs: bilateral trade costs between Commonwealth members are estimated to be 19% lower than those involving other trading partners.
And who were our biggest export markets among the Commonwealth nations?
Our top five international goods export markets within the Commonwealth were India, New Zealand, the UK, Malaysia and Papua New Guinea.
India alone received 60% of total Queensland exports to Commonwealth nations in 2017, in large part due to sizeable exports of coal and chickpeas. India is also our largest Commonwealth market for international students coming to Queensland, and New Zealand is our largest Commonwealth market for inbound international visitors.
So those were the high-profile markets. Were there any lesser-known Commonwealth markets buying Queensland products that might surprise us?
Yes, absolutely. For example, Queensland exports are making headway with some of our Commonwealth partners in Africa.
South Africa, Nigeria, Kenya and Ghana were among our fastest growing export markets in the past year. Major export items included coal and minerals, industrial machinery, telecommunications equipment, scientific instruments, and food.
How about investment? Are Commonwealth nations providing significant backing for Queensland ventures?
The United Kingdom has been a long-term investor in Queensland, across a number of sectors. And New Zealand is another big player — in the 1980s, Australia and New Zealand signed a key trading agreement that boosted trans-Tasman investment flows. In recent years, Canada and India have also been investing in Queensland.
The BG (formerly British Gas) Group invested billions of dollars in Queensland’s gas developments over several years to 2015. Vodafone Group, Deloitte Australia and Virgin Group are all recognised global British brands actively trading in Australia now.
Another interesting investment came from Canada. In late 2013, Caisse de dépôt et placement du Québec, Canada’s second largest pension fund, acquired 26.7% of the Port of Brisbane, which is Australia’s third largest container port.
So, if you were a Queensland SME thinking about exporting within the Commonwealth family, where would you be looking?
According to the Australia’s International Business Survey 2017, most of our SME exporters favour countries like the United Kingdom and New Zealand because their economies and cultures are similar to ours.
These are good reasons, but I think exporters should also consider opportunities in emerging Africa. Some of sub-Saharan Africa’s largest economies are Commonwealth nations — including South Africa, Nigeria and Kenya — and, thanks to rising incomes, urbanisation and the spread of technology, a strong consumer sector is emerging.
Another event that’s coming to Brisbane soon is the Routes Asia conference, where the aviation sector gets together to discuss the best flight routes for people and cargo. How important is air transport to Queensland’s exporters?
Outbound air freight has increased in recent years, driven by a globally competitive Australian dollar and strong demand for agricultural produce, particularly from Asia. Time-sensitive agricultural output — including seafood, meat, dairy and high-value fruit and vegetables — makes up a sizeable share of Queensland’s air freight exports.
Changing global eating habits are having a major impact in this area. For example, a decade ago Chinese consumers used to eat seasonally and locally, but now they can afford to fly in prime meats and macadamias from Queensland throughout the year.
What are the major export products sent by air from Queensland?
Queensland produces about half of Australia’s meat and horticultural products, and an increasing amount is being exported by air. In 2017, $583 million worth of food exports left Brisbane airport, which was almost double the value recorded in 2013. Major export items included boxed beef, other meat products, horticultural goods, and seafood.
Brisbane Airport also exports specialised transport equipment, scientific measurement instruments and medicinal and pharmaceutical products.
To finish up, can you see any trends developing that you’ll be following in future trade figures?
Whenever there is a shift in trade policy we track its impact on Queensland’s export performance. For instance, the Peru-Australia Free Trade Agreement (PAFTA) was signed this month and Queensland agricultural producers are likely to be some of the biggest winners when the new agreement comes into force. I’m not sure when that will be, but I’ll certainly be checking future figures for trends once that market opens up.