Australia: a commercial gem hidden across the world from the United States

Business America, August, 1997 by Gary Bouck

A commercial gem -- hidden across the world from the United States -- is English-speaking, consumer-oriented, affluent Australia, a high-tech, modern society with a longstanding preference for goods and services from the United States.

Americans and Australians seem inherently to like each other and regard one another with the friendship that comes from a shared heritage and cultural values. The two nations have maintained a longstanding political and military alliance, dating back to the time the first American whalers visited the newly-discovered southern nation.

Yet despite the friendship and close ties, most Americans don't know much about the real Australia. While television documentaries show Americans the wonders of Australia's vast continental landmass and unique wildlife and popular Australian movie and sports heroes reinforce stereotypes, few Americans have an accurate view of Australia's contemporary society and economy.

Australia, an island-continent similar in size and shape to the continental United States, has abundant natural resources. While its center is flat, dry and mineral rich, the coastal areas are wet, mountainous and densely forested. Its interior plains are rich and fertile, supporting great varieties of farming, viticulture (grape-growing), dairy and meat production, both naturally watered and irrigated.

Australia is the most urbanized society in the industrialized world. Of its 18 million people, more than 85 percent live along the east and southeast coast in the cities of Sydney, Melbourne, Adelaide and Brisbane, with populations of several million each, and in adjacent urban regional centers within 60 miles of the ocean. Two other major cities are Darwin on the north coast and Perth on the west coast. The society is increasingly multicultural, with the traditional Anglo-Celtic majority joined in recent years by substantial minority populations from Southern and Eastern Europe, the Middle East, Latin America and Asia.

While the Australian domestic market is relatively small -- similar to that of Texas -- compared to more highly-populated countries, it is a developed, highly-diversified and sophisticated market that serves a contemporary industrial base and an urban, western population. It has modern banking, financial and legal systems that share similar business practices with the United States.

With the exception of the Netherlands, which is a pass-through market for distribution into the European Union, Australia -- with U.S. exports there of $12.0 billion and a U.S. trade surplus of $8.1 billion in 1996 -- represents America's largest worldwide country-market trade surplus. Current leading sectors for U.S. exports include environmental products and services, computers, peripherals and software, telecommunications equipment and services, automotive parts and accessories, security and safety equipment, laboratory and scientific equipment, medical equipment and health care services, defense equipment, construction equipment (engineering and non-residential), aircraft and parts, and food processing and packaging equipment.

Due to its ongoing privatization program, Australia is seeking investors in the areas of air transport, rail, road and sea transport, telecommunications, energy, water and sewerage, building and construction.

Tourism and leisure activities have always been Australian strengths and are among the fastest-growing areas of economic activity in the country. American providers of a broad range of support products and activities should not overlook one of the world's premier travel and leisure destinations. The selection of Sydney as the site of the Olympic Games for the year 2000 has tremendously accelerated growth in these already-dynamic sectors.

Doing business in Australia is simple for the U.S. exporter or investor when compared with other markets in Asia, not to mention the difficult markets of Eastern Europe, the Middle East, and the developing world. The language, and to a large extent the cultural environment and business practices, are shared with the United States. Customer expectations concerning price, quality and service for industrial and consumer goods are very similar.

Channels of distribution are through direct sales, use of distributors or agents, or through direct investment. Financing of exports is effected through open account, drafts, letters of credit and cash in advance. Foreign exchange is readily available to the Australian importer through local banks. Australia imposes virtually no exchange controls or import license requirements on the import of goods and services. Foreign investment is encouraged with only minimal requirements for government review in certain sectors.

Australia presents the opportunity for an American company to do business in a familiar country with strong business potential based on solid partnerships, steady long-term growth, and increasing importance as a regional headquarters for doing business in Asia.

U.S. companies are encouraged to start prospecting Australia's business environment for these "hidden gems" of opportunity.