Our close commercial ties with the United Kingdom are a reflection of Australia’s strong fundamentals.

Australia’s links with the United Kingdom, reflecting shared history and personal ties, are strong and vibrant. Ours has been an enduring, global relationship that is important to both our countries. In particular, the continuing people-to-people links and our broad education, cultural and sporting ties provide a closeness to the relationship that the people of both Australia and the United Kingdom value.

This closeness is reflected in the thriving commercial links that remain at the core of the relations between the two countries. Bilateral trade in goods and services amounts to A$18bn a year. Of particular note is the breadth and importance of the trade in services, amounting to A$7bn between the two countries.

The United Kingdom is the second largest foreign investor in Australia, and the United Kingdom is also the second largest destination for Australian investments abroad. Companies from the United Kingdom rightly see Australia as an attractive base for regional operations in the Asia Pacific. Similarly, Australian firms are keen to capitalise on the advantages of using Britain as a base for their operations in continental Europe.

Australia has unique characteristics to offer to foreign companies. We are a western and advanced industrial nation next to Asia, with strong links to the United States and Europe. We play a constructive role in the evolving economic and regional architecture of the Asia Pacific. These advantages have not gone unnoticed in Europe. Around a third of all foreign corporate regional headquarters operations in Australia are European, and of these almost half are British.

Stronger and more competitive than ever
Above and beyond Australia’s role as a gateway to the Asia Pacific, the fundamentals for doing business in Australia are very good. Australia’s economy is stronger, more competitive and more flexible than ever. During the 1990s Australia averaged 3.6% annual domestic growth, while the US has averaged around 3.2%. Australia averaged annual productivity growth of approximately 1%, compared with 0.25% in the US. The Australian economy is again expected to be one of the fastest growing in the industrialised world in the coming year. The budget is in surplus and government debt is down amongst the very lowest in the OECD. Significant reforms of the taxation system and industrial relations have also made important contributions to the competitiveness of Australia’s businesses.

A year of achievement and tragedy
In the year 2001 we celebrated Australia’s Centenary of Federation. It was a year to be proud of what Australia has accomplished in the last century. It was also a year which witnessed on 11 September one of the worst acts of crime the world had seen. Australia and the United Kingdom have been at the forefront of the world’s response to that tragedy.

Despite the challenges that the world faces, one constant will continue to be the strength of the ties that link Australia and the United Kingdom. I invite the British-Australasian business community to join us in looking forward to a flourishing partnership continuing as strongly in the 21st century.