April 2007

European Union - Australia Trade in Goods - 2006

In 2006, the EU remained Australia's largest merchandise trading partner (measured in two-way trade), accounting for 16.7% of total trade in 2006 ($A56.7bn + 9.4%), down from 17.6% in 2005 and a high of 19.4% in 2003. ASEAN is now Australia 's next largest trading partner (15.9%), followed by the Japan (14.6%), China (13.5%) and the USA (10.1%), See Figure 1.

Australian exports to the EU increased by a very strong 36% in 2006 to $A20.3bn. Even excluding volatile gold exports, EU exports grew by a robust 21% in a year when total exports rose by 18%. As a result, exports to the EU accounted for 12% of total Australian exports, and the EU regained the position as the third most important market for Australian exports after Japan ($A32.4bn, or 20%) and China ($A20.4bn, or 13%) and ahead of ASEAN ($A18.8bn, or 12%) and the USA (6%).

Despite Australian imports from the EU falling by 1.2% to $A36.5bn in 2006, the EU is still Australia's principal source of imports, with EU imports accounting for 20.7% of total imports. ASEAN is the second most important source ($35.1bn, + 25.6% or 20.0% of total imports); followed by China ($A25.5bn, +19.3% or 14.5%); and then the USA ($A24.4bn, + 13.9% or 13.9%), See Figure 3.

Australia had a merchandise trade deficit with the EU of $A16.2bn in 2006 (down from $A22.0bn in 2005). This compares with a trade deficits of $A16.3bn with ASEAN, $A14.3bn with the USA ; and $A5.1bn with China . Australia had a trade surplus of $A15.1bn with Japan .

In terms of trade between Australia and individual EU Member states, Australia's largest source of imports from within the EU continued to be from Germany (accounting for $A9bn of total EU imports, or 25% of the total), while the top destination for Australian exports remained the United Kingdom (accounting for A$8bn of Australian exports to the EU, or 40% of the total). See Figure 4. In addition, 2006 saw healthy levels of trade growth between Australia and many of the newer EU member states, particularly in Australian exports to these countries. Australian exports to Malta and Estonia increased by 820% and 400% respectively, albeit from a comparatively low base, See Figure 5.

In fact, Australian merchandise exports to the 10 EU Member states which acceded in 2004 have grown by 9% over the past five years (trend growth rate), compared to a growth rate of 6% for the previously existing Member states over the same period. In the case of merchandise imports, growth in merchandise imports from the EU-10 was almost four times that of the EU-15 over the same period (with five year trend growth rates of 20% and 5%, respectively).

In 2006, the three largest export items from Australia to the EU25 were (see Figure 6 for detail):

• coal, worth $A3.7bn or 16% of total Australian coal exports and 18% of all Australian exports to the EU;
• gold, worth $A2.9bn or 32% of total Australian gold exports and 14% of total Australian exports to the EU. Underlying the volatility of gold trade, exports increased by $2.3bn or nearly 370%;
• alcoholic beverages - principally wine, worth $A1.3bn and accounting for 46% of total Australian wine exports and 6% of total Australian exports to the EU.

Other star performers in terms of Australia 's merchandise exports to the EU included:

• nickel ores, which increased in value by 206% on the previous calendar year to be worth $A855mn (or 63% of total Australian exports of this item);
• combustion engines, which increased 115% in value to $A181mn, or 22% of total Australian exports of this item;
• leather, which saw a 171% increase in value to be worth $A145mn, or 36% of total Australian leather exports.

For the same period, the three largest import items into Australia from the EU were (see Figure 6 for detail):

• medicaments (including veterinary), worth $A4.1bn, or two-thirds of Australia 's total imports of this item and 11% of all imports from the EU;
• passenger motor vehicles, worth $A2.8bn, or 22% of imports of this item and 8% of total Australian imports in this category; and
• telecom equipment, valued at $A1.2bn, or over 20% of total imports of this item, and 3% of total imports.

Amongst merchandise imports from the EU, other star performers for 2006 included:

• gas pumps, which increased by 36% in value on the previous calendar year to a total of $A590mn, or 36% of all Australian imports of this item;
• goods vehicles, increasing 30% in value to account for 16% of all Australian imports of goods vehicles, or $A724mn; and
• non-electrical machinery, which increased 23% in value to $A473mn, accounting for 45% of all Australian imports of this item.

Figure 5 - Merchandise trade with the EU's 25 Member States, 2006

Source: Australian Bureau of Statistics

Source: DFAT, Personal Communication

(1) at three digit SITC level;

(2) trend change

this page updated January 24, 2008