Rising global protectionism is creating concerns for Australian corporates who say it could create skills shortages, higher business costs and reduced international opportunities.
To overcome these challenges, Australian businesses are developing new growth strategies to navigate uncertainty, as revealed by HSBC’s latest Commercial Banking report, Navigator: Now, next and how for business.
The research reveals that within the next three to five years, Australian firms plan to expand their business activities in the US, China or the UK.
Indeed, almost half of Australian businesses (44 per cent) believe that BREXIT will positively impact their business, an outlook significantly higher than the global average of 24 per cent and second only to India at 49 per cent.
“Approximately 1,500 Australian companies are currently active in the UK, many using the country as a base for Europe, and our survey shows a high degree of optimism about the benefits of a potential free trade agreement (FTA),” said Steve Hughes, Head of Commercial Banking, Australia.
“Australia is already the top supplier of wine sold in the UKi, accounting for one in five imported bottles of wine consumed. A new FTA could stimulate British appetite for other Australian products and services, and also allow Australia to become an entry point for UK businesses entering Asia,” he added.
While some barriers may exist for Australian corporates looking to take their raw materials and services to new markets, the report highlights the value of solutions such as joint ventures or setting up overseas subsidiaries in overcoming these challenges.
“As an economy that is reliant on offshore demand, it’s imperative that Australia’s trade policy continues to support the majority of local firms who believe that open markets will bolster their international ambitions,” added Steve.
HSBC’s report, titled Navigator: Now, next and how for business, is based on a survey of 6,000 companies in 26 markets, including 200 firms in Australia and an economic forecast of medium–to long–term bilateral trade in 25 countries and territories. To download the report please click here.
Protectionism refers to government actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition.
Services are becoming an increasingly important component of Australia’s economy, accounting for just over a fifth of exports in 2017.
i Australian Department of Foreign Affairs and Trade, United Kingdom country brief
ii Growing Trade with the UK (Media Release), The Hon Steve Ciobo MP, Minister for Trade, Tourism and Investment, 26 March 2018
iii Growing Trade with the UK (Media Release), The Hon Steve Ciobo MP, Minister for Trade, Tourism and Investment, 26 March 2018