Which government level manages Australia's trade with other countries?

Answer

The Federal government

Explanation

The federal government manages Australia's trade with other countries. International trade is a head of Commonwealth power under section 51(i) of the Constitution (trade and commerce with other countries and among the states), and is administered through the Department of Foreign Affairs and Trade (DFAT), supported by specialist agencies and ministerial councils.

DFAT negotiates bilateral and multilateral trade agreements on behalf of Australia. Major agreements include the ASEAN-Australia-New Zealand Free Trade Agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), free trade agreements with China, Japan, South Korea, Singapore, Thailand, Indonesia, Malaysia, the United States, the United Kingdom, India, Chile, Peru, and the European Union, and agreements with the African Continental Free Trade Area. Australia is also a founding member of the World Trade Organization (WTO).

Trade is a major part of the Australian economy. Australia exports about 600 billion dollars of goods and services each year, equivalent to about 25 per cent of GDP. Major exports include iron ore (about 130 billion dollars), coal (90 billion), liquefied natural gas (80 billion), education services (40 billion), gold (35 billion), and tourism, agricultural products, and manufactured goods. China is Australia's largest trading partner, with about 30 per cent of exports, followed by Japan, the Republic of Korea, India, and the United States.

Trade policy is coordinated through several federal agencies. Austrade promotes Australian exports and investment, with offices in 80 countries. The Department of Agriculture, Fisheries and Forestry handles agricultural trade and biosecurity. The Department of Industry, Science and Resources covers industrial exports including critical minerals. The Australian Trade and Investment Commission (Austrade) and the Export Finance Australia agency support exporters with finance and risk management. Tariffs and import duties are set by the Commonwealth Tariff Act and regulated through the Australian Border Force. Anti-dumping investigations are led by the Anti-Dumping Commission. State and territory governments support trade through their own investment promotion agencies but cannot make their own international trade agreements or impose tariffs.

Why this matters for your test

International trade is exclusively a federal responsibility, and recognising the major agreements and the scale of Australian exports helps new citizens understand the country's economic position.

Source: Australian Citizenship: Our Common Bond (2024)

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