GCC-Australia Trade Ties Deepen

Trade between the six-nation GCC and Australia has come a long way, with 2013 witnessing double-digit growth

Even without a free trade agreement, 2013 was a good year for Australia-GCC trade. “Our trade with the GCC, with all the six members, that’s gone up about 21 percent compared with the year before [2012],” says Australia’s ambassador to the UAE, Pablo Kang.

Breaking down the bilateral trade figures, Australia’s exports to the region increased 28 percent in 2013 to a total value of $6.33 billion. Australia exports increased at a faster rate than imports from the GCC, which rose 12 percent to $4.83 billion. Within the GCC, Australia-UAE trade dominates, accounting for just over half of all bilateral trade with the bloc. The UAE is Australia’s largest trading partner in the Middle East and North Africa, and the 15th largest worldwide. In the past, trade between the two countries has fluctuated, but Kang argues that was largely the result of a lack of diversity that is now beginning to change. “In terms of imports from the UAE, it’s been dominated by crude imports — about half of our bilateral trade,” he says. “In terms of exports, it’s been alumina.”

Australian meat, particularly lamb, and other agricultural products have also featured prominently in exports. Figures for 2013 reveal a change in that trend. “A 48 percent increase in motor vehicles, 500 percent increase in oil seeds — that’s from 50 to 289 million [Australian dollars], and just a steady growth in food, meats slightly up, vegetables are slightly up,” says Gerard Seeber, Australia’s senior trade commissioner and consul general to the UAE.

While oil seeds are still an agricultural product, the increase in passenger motor vehicles is a relatively new trend. “These are areas that haven’t been particularly prominent in our bilateral trade,” says Kang.

Despite the significant growth in trade, officials see plenty of room for Australia to be more proactive in building its regional profile and strengthening ties with the region. “We need to remain competitive, and we need to lift our profile and have that kind of high-level government engagement, as well in support of business,” says Kang. The Australian Trade Commission is holding the Australia Unlimited event for the second year running this month, with the country’s trade minister, Andrew Rob, is likely  to be in attendance. “It’s a competitive market, everyone is coming here,” says Kang.

 “There’s positive noises about re-engaging. If there’s strong will to achieve it, it can be done quite quickly.”

Concluding negotiations between Australia and the GCC on a free trade agreement would fortify Australia’s trade relationship with the bloc. “Trade has gone up so much, even without negotiations to reduce barriers, so obviously the potential is even greater if you can factor that in,” says Kang.

Talks have been on hold for some time now, but Kang and other officials are confident that an agreement will be signed. “There’s positive noises about re-engaging,” says Seeber. “If there’s strong will to achieve it, it can be done quite quickly.”

Seeber says the current discord between some GCC member states over the Muslim Brotherhood has not affected Australia’s preparations for negotiations, but he would not comment on the GCC’s position.

“That’s something for them to figure out.” Seeber says he is not concerned that the current tension could delay talks further. “It’s been delayed for a few years already, so it’s just a matter of continuing discussions and being prepared for the moment.”

Regardless of the stalled negotiations, the UAE and the wider GCC will remain important trade partners for Australia. Seeber says there are now more than 350 Australian companies operating in the UAE, and he’s particularly excited about the potential that the build-up before Expo 2020 holds.

“We need to start banging our drum again, let people know that we are well established in the market place, in a broad range of areas — design, engineering, construction, education, retail, hospitality,” he says. “We need to do that.”