Professor Jenny Corbett
Professor of Economics
Executive Director, Australia-Japan Research Centre
Crawford School of Economics and Government
Executive Director, Australia-Japan Research Centre
Crawford School of Economics and Government
- Because of the role of parts and components trade there are difficulties in accurately measuring the source of Australia’s imports from Asia and, therefore, the role of different Asian countries in the economy of East Asia and in Australian-Asian economic relations. Much emphasis today is placed on China, but although many imports come from China, component parts of those products are frequently manufactured elsewhere. Also, the manufacturing and assembling firms in China itself may well be Japanese investments. Some of the decline in Japan’s trading role with Australia comes from a substitution of “trade made in Japan” for “trade made for Japan”.
- A second distortion in public discussion concerns the emphasis placed on the resources industry. Resources in fact amount to only 5% of Australia’s GDP, whereas services are close to 70%. In our exports, services stand at around 22 %, resources at nearer 34%. There is enormous potential for the expansion of service exports.
- Services exports are subject to a variety of barriers. Behind-the-border barriers (such as restrictions on commercial establishment and direct investment) are more important than conventional trade barriers. Trade negotiations are not well suited to negotiating on these issues and there might be merit in considering specific services economic agreements in the region. An example is the current negotiation with Japan where Australia might achieve greater gains by concentrating on services rather than continuing to debate the intractable problem of agriculture.