Australia’s trade with Spanish-speaking countries is ever expanding
Spanish is a language of international trade. It provides access to the most important free trade zones in the world: through Spain to the European Economic Community (EEC), through Mexico to North American Free Trade Agreement (NAFTA) and through Latin America to Asia-Pacific Economic Cooperation (APEC).
The Latin American region is the second fastest growing economy in the world. Other significant trade agreements in the region, such as Mercosur ( Argentina, Brazil, Paraguay, Uruguay and Venezuela) and the Group of Three (G3), comprising Mexico, Venezuela and Colombia alone create a market opportunity for Australia of some 350 million consumers.
The Spanish-speaking Pacific region offers newly-created opportunities for Australian investment. Brazil, the ‘sleeping giant’ of Latin America, could lead a South American Free Trade Zone as a counterbalance to NAFTA. The proposed Free Trade Area of the Americas (FTAA), which was to encompass the entire American continent, from Canada to Chile, was abandoned in 2004.1
“The jobs of many Australians can be attributed to foreign investment. It is estimated that more than half a million people in metropolitan and regional Australia work in firms with majority foreign ownership. Many more work in firms and communities that rely on foreign-owned companies as customers and suppliers of goods and services. One in five jobs in the manufacturing sector are in firms with majority foreign ownership and more than one in four jobs in the mining industry are in enterprises that are substantially foreign owned. Research suggests that for every 5–6 per cent increase in investment, gross domestic product (GDP) increases by 1–2 per cent. It is also estimated that foreign controlled companies operating in Australia account for 18 per cent of the nation’s revenue. In this context, it is significant that for every dollar of output generated from foreign investment in Australia, 96 cents is retained in Australia primarily in the form of wages to employees, taxes and reinvestment in Australian operations. Firms with substantial foreign ownership account for about 25 per cent of Australian exports. Australian Bureau of Statistics (ABS) data also indicates that foreign-owned firms are more likely than domestically owned firms to export, thereby enhancing the economy’s capacity to grow. In addition, there is evidence that FDI encourages industry innovation. ABS analysis indicates that foreign owned businesses in Australia spent an average of A$2 million on local research and development (R&D) activity, compared with an average R&D expenditure by locally owned firms of only A$920 000. This is supported by a 1998 Business Review Weekly survey, which revealed that more than half of the top 50 most innovative companies in Australia at the time were foreign-based companies.”2
To influence corporate Australia and assist in developing governmental policies, the Council on Australia Latin America Relations (COALAR) was established in 2001 by Mr Downer, Minister for Foreign Affairs and Mr Vaile, Minister for Trade to enhance Australia’s economic, political and social relations with Latin America. Since its inception, COALAR has made strengthening Australia’s commercial relationships with Latin America an overarching goal. In support of this, COALAR has established four priorities: education, tourism, business and culture.
“The Council on Australia Latin America Relations will seek to advance Australia’s relationship with the region at an economic, social and political level, delivering initiatives that will build the relationship and raise awareness among Australians of the opportunities that the region presents.”
Minister for Foreign Affairs, Alexander Downer and Minister for Trade, Mark Vaile, March 2001
- Skilled multilingual workforce
- Australian-Hispanic economic relations:
- Australian companies in Latin America
- Important web links