The U.S. Chamber recently led a business delegation to Australia to advocate for private sector priorities in the deepening U.S.-Australia alliance. In Sydney and Canberra, the group met with a wide range of officials, discussing all aspects of the bilateral relationship.
The agenda was robust, including the proposed “A Future Made in Australia” program, AUKUS, Australian and U.S. politics, a focus on economic security, China, reforms to Australia’s Foreign Investment Review Board, supply chains, critical minerals, energy markets, and healthcare. While the U.S. and Australia’s closeness is obvious, it was helpful to hear more about areas of divergence in such a broad partnership.
Key Takeaways
“Prodded by reality to work more closely together": The U.S.-Australia alliance is modernizing, expanding notions of defense and national security well beyond traditional military hardware into tech innovation, foreign investment laws, energy security, and more. This is built on decades of trust but also springs from the present geostrategic environment. China’s economic coercion of Australia in 2020-2022 was unsuccessful—and relations today are on a friendlier footing—but it’s clear Australians won’t forget the experience and are focused on mitigating critical dependencies.
While the U.S. no longer leads on trade, Australia will not walk away: Washington’s exit from the Trans-Pacific Partnership, more modest initiatives like the Indo-Pacific Economic Framework, lack of enthusiasm toward traditional trade agreements, and a recent about-face on long-held views on digital trade have left a void in global trade leadership. For Australia, though, the equation is different: An island nation whose economy depends on trade, Australia is continuing to robustly engage with bilateral and multilateral efforts and is encouraging the U.S. back into the fold.
Drivers of a “Future Made in Australia": Australia’s commitment to net zero and decarbonization underpins policies from Prime Minister Anthony Albanese’s government and the opposition. How to get there, though, is where different actors diverge. Plans for investment in renewables compete with a “balanced approach” featuring renewables, gas, and nuclear energy. Albanese’s newly-announced “Future Made in Australia” plan—a modestly scaled response to the U.S. Inflation Reduction Act—aims to make Australia a renewable energy superpower and identify “desired areas of sovereign capability.” While the initiative seeks to balance economic and strategic interests, we heard real concerns about the efficacy of new forays in industrial policy.
Foreign investment screening should expedite low-risk investments: Australia’s government is streamlining how it reviews low-risk foreign investment proposals, allowing Treasury to focus its attention on rigorous assessment of higher-risk applications. These reforms to the Foreign Investment Review Board framework include information on the investor (who), the target of their investment (what), and the structure of the transaction (how.) An example of a low-risk investor would be an entity with a strong record of compliance—including firms with a longstanding presence in the country—and a clear ownership structure investing in a non-sensitive sector (manufacturing, professional services, commercial real estate, etc.).
COVID’s forgotten regulatory pragmatism: Australia compares poorly to its OECD peers in its provision of timely, cost-effective access to medicines to its citizens. However, during the COVID-19 pandemic, this process accelerated, and regulations were made more pragmatic due to urgency. Can that sense of pragmatism be returned to the pharmaceutical and medtech sectors and replicated across other industries? If it worked well for some years as a test case, what similar reforms might be possible?
An FTA to celebrate: 2025 marks the 20th anniversary of the U.S.-Australia Free Trade Agreement, which has been a great success by any metric. As we mark the occasion, no one is proposing to reopen the text, but business and government are keen to explore avenues to enhance its operation and maximize its benefits.
Looking Ahead to 2025
As these views were shared by government and opposition alike, they should hold no matter the result of the next Australian election. Voters go to the polls no later than May 2025. Polls show that the governing Labor Party and the opposition Liberal/National coalition are more or less evenly matched.
This visit reaffirmed Chamber members’ views on the vitality of the U.S.-Australia alliance and the key role that private sector perspectives play in economic and strategic conversations. As both the U.S. and Australia head toward elections, we will continue to advocate for U.S. business interests, seek further engagement with both governments and assess opportunities for member companies in a dynamic geopolitical environment.
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