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Australia’s Medium- to Long-term Trade Strategies and Korea-Australia Cooperation Plans economic cooperation, international trade, barrier to trade, trade policy

Author Nam Seok Kim, Meeryung La, Ina Choi, Minlee Shin, and Hanbyeol Jang Series 23-02 Language Korean Date 2023.12.29

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This study analyzes Australia’s medium-term and long-term trade strategies with a focus on supply chains, digital trade, climate change, and development cooperation. Based on the Australian government’s policy measures in response to these key economic issues, this study derives cooperation plans between Korea and Australia. The authors diagnose the situations Australia faces in these four areas to understand the background of the Australian government’s policy responses. Based on an analysis of Australia’s domestic industrial and international cooperation policies, it discusses ways in which Korea and Australia can expand their cooperation.


In the 2020s, the world has experienced a global outbreak of pandemic, strategic competition among major powers, and a series of armed conflicts between nations, leading to supply chain crises and an expansion of protectionist trade policies. As a result, nations are formulating strategies to expand cooperation, focusing on alliances or groups of nations with shared values. Korea also aims to expand economic solidarity with likeminded countries such as Australia to establish resilience against potential deteriorations in global economic conditions coming from geopolitical risks.


In regard to restructuring of the supply chain, Australia has faced a series of challenges caused by disputes with China. As the trade relations between the two countries deteriorated, retaliatory tariff measures and import restrictions followed. With China being Australia’s largest trading partner, and both countries heavily relying on each other for various products, these trade disputes had a significant impact on the stability of supply chains. While Australia was successful in swiftly diversifying its trade partners, the Australian government recognized the necessity of establishing a national supply chain management system and strategies to adapt to rapid changes in the international economy.


The Australian government consistently endeavors to strengthen the stability of its supply chain through international cooperation. It has fostered extensive supply chain cooperation in manufacturing, healthcare, energy resources, and food resources through initiatives such as the Supply Chain Resilience Initiative with India and Japan, the Australia-UK Joint Supply Chain Resilience Initiative, cooperation within Quad, and active participation in the IPEF. Additionally, the Australian government has established the Office of Supply Chain Resilience under the Department of Industry, Science and Resources to coordinate collaboration among departments. The Australian government also announced the Critical Minerals Strategy in 2019, 2022, and 2023, focusing on critical raw minerals for key strategic industries.


This report proposes enhancing bilateral collaboration between Korea and Australia in supply chain early warning systems. As Korea has launched its own national strategy to secure core minerals, the two nations can engage in stronger communication for the supply and demand of critical raw minerals. The comparative advantages of both countries in international technology certifications, technology standardization, ESG, and eco-friendly mining technology allow joint projects in mineral infrastructures to be promising and productive.


Leveraging one of the world’s most advanced digital transformations proceeding in Australia’s private sectors, the Australian government is promoting its Digital Economy Strategy and Digital Trade Strategy. The nation plans to emerge as a global top ten digital economy and society by 2030, toward which it is engaged in multiple core tasks, including efforts to commercialize quantum technology and 5G technology innovation. In pursuit of advanced digital trade, Australia’s Department of Foreign Affairs and Trade has established 13 digital trade rules to focus its management capacities.


Based on the leadership role it already plays in digital trade at the APEC, OECD, and G20, the Department of Foreign Affairs and Trade remains proactive in leading digital trade-related cooperation agendas. This research proposes upgrading the Korea-Australia bilateral Free Trade Agreement to establish norms for upcoming digital trade expansion and suggests coordinating new agendas for APEC in 2025, hosted by Korea. Additionally, it recommends active cooperation between the two countries in setting international standards for digital trade and collaborating on quantum technology development by aligning Korea’s Quantum Science and Technology Strategy and Australia’s National Quantum Strategy for joint projects.


 To actively respond to societal and economic changes caused by climate change and adapt to structural changes in related industries, the Australian government has formulated national strategies such as Powering Australia, Climate Change Act 2022, and the National Hydrogen Strategy. The Powering Australia strategy is the government’s primary response to climate change, focusing on the utilization of renewable energy sources, reducing greenhouse gas emissions, creating jobs in related industries, and easing electricity cost burdens. The National Hydrogen Strategy encompasses 21 measures to foster hydrogen-related businesses as a core energy industry in the future.


In addition to promoting national strategies, the Australian government is broadening its efforts toward international cooperation for climate change response, aligning with Japan, Germany, Korea, and others. Korea is expanding climate change cooperation with Australia in both governmental and private sectors. In 2022, multiple MOUs related to climate change response were signed, and a Korean firm was selected for financial support from a state government in Australia. Building upon the existing collaborative achievements between Korea and Australia, this study proposes advancing cooperation in the hydrogen sector, enhancing collaboration in eco-friendly transportation, and expanding joint discussions on trade barriers in carbon. Particularly, to strengthen cooperation in the hydrogen sector, there is a need to develop medium- to long-term blueprints for collaboration in hydrogen carrier ships, reinforce support for companies that enter the Australian hydrogen sector, provide financial support for pilot projects, establish local company information databases in Australia, and streamline customs clearance for related products.


Australia’s recent development cooperation initiatives, in line with its Indo-Pacific strategy, have been heavily focused on Pacific Island nations and Southeast Asian nations. Australia’s International Development Policy prioritizes Pacific Island nations, and Australia aims to stimulate private sector investments in Southeast Asian nations based on its Southeast Asia Economic Strategy to 2040. Since Korea is also formulating its own IndoPacific strategy, Australia’s achievements in developmental cooperation targeting Pacific Island nations and Southeast Asian nations provide significant insights for Korea to enhance its development cooperation initiatives.


This report suggests for the Korean government to leverage cooperation with Australia to explore tailored and optimized development cooperation programs for Pacific Island nations. Further emphasis is placed on the need for coordination among donor countries to prevent inefficiencies resulting from aid competition. Exploring promising avenues for trilateral cooperation among Korea, Australia, and the US or supporting Australia-led development cooperation programs should be considered. Regarding ASEAN, exploring options to jointly support relevant projects for implementation of the ASEAN Outlook on the Indo-Pacific (AOIP), already supported by both Korea and Australia, could be considered. Building upon the major cooperative projects identified in the existing multilateral channels between Korea, Australia, and ASEAN, Korea and Australia need to expand cooperation in emerging fields such as Southeast Asian infrastructure development, smart cities, and cyber/digital innovation. 

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