The Multilateral Context for European and Australian Economic Cooperation

This environment has allowed mutually beneficial trade with foreign firms competing in domestic markets, domestic firms growing through exports and the transfer of technology and ways of working between countries and regions. Broader economic development has also seen dramatic increases in income and living standards. But recently, the Russian invasion of Ukraine, the trade disputes between the United States and China, and the development of regional trade agreements have led some commentators including the IMF (Georgieva et al, 2022) to suggest that we are seeing an increase in global fragmentation as discussed by Naisbitt (2022).

Within this global setting there have been enduring commercial ties between European countries and Australia. Exports from European countries to Australia have been weighted towards manufactured products particularly machinery and equipment, while exports to European countries from Australia have been weighted towards agricultural and mineral products. The future of the European-Australian trade relationship will be shaped by domestic economic developments in each region together with broader developments in the global economy. In this box, I set out the multilateral context for greater European-Australian cooperation, concentrating on global competition for capital, global competition for energy and the changing trade patterns resulting from economic fragmentation.