Australia and Australia and New ZealandNew Zealand

Business Prospects

Keith Kirkham – A/Senior Commercial Officer CS Australia/NZ

OutlineOutline

• The Good Story• The AUSFTA

• Some Key Opportunities in Australia and New

Zealand• How to Begin

Differences Obvious & SubtleDifferences Obvious & Subtle

• Counter-seasonal• Multicultural with European patterns• Indigenous Supply• Influence in the Region

MisconceptionsMisconceptions

This Country Is a Continent

Australia is Australia is the 7the 7thth most most urbanized urbanized country in country in the world.the world.

Australia Population Density

More than 80% of population in this ring

The Good StoryThe Good Story

• Strong, Resilient Economy

• Ease of Doing Business

• Purchasing Power• A-US Free Trade

Agreement

The EconomyThe Economy

• 15th year expansion• Low Inflation/Low

unemployment• High Capacity

Utilization and Capex• Forecast 3.25%

growth

America’s Strong Trade Position

• American exports to Australia $17.7 billion

in 2006

• U.S. trade surplus with Australia approx US$8 billion

• U.S. is major foreign supplier;15.2% of the import market

The Market Drivers: The Market Drivers: AustraliaAustralia

• Commodity Prices: strong Asian demand

• Infrastructure spending to add capacity

• Trading partner growth

Role of Resources

Aus Mining Capacity

Aus Adding Capacity

Drought

• Shaving almost 1% off GDP growth• During high commodity prices• Crop yields 50% or less than normal• Water use and major projects

““Suddenly, I’m Thirsty…”Suddenly, I’m Thirsty…”

Market Drivers: New Market Drivers: New ZealandZealand

• Commodity Prices (e.g. dairy)

• F/X• Trading Partners’

Economies• In Migration• Tourism

New Zealand RisksNew Zealand Risks

• Oil prices• Strong NZ $ drags

export economy• Highly Leveraged

consumers shift demand from consumer to industrial spending

Australia RisksAustralia Risks

• Oil prices• Continued Drought• Labor shortage/wage

inflation

Strong A$ and NZ$ EffectsStrong A$ and NZ$ Effects

• Drags export growth and revenue in F/X sensitive areas

• Increases U.S. exporter price advantage, Aussie and Kiwi purchasing power

Ease of Doing BusinessEase of Doing Business

• Sophisticated Market• World Class infrastructure • Politically stable• Excellent IPR regime• Transparent processes• Technology intensive

Purchasing PowerPurchasing Power

Purchasing Power: Getting Purchasing Power: Getting Richer QuickerRicher Quicker

• Terms of trade rose 13%• Real Gross Domestic

Income (GDI) 5.2%• National income growth

among highest in the developed world (higher than US or Japan)

Australia-U.S. Free Trade Australia-U.S. Free Trade AgreementAgreement

Major Benefits for U.S. Companies – Tariff Reduction

• eliminated on 99% of manufactured goods• eliminated all agricultural tariffs, distilled spirits

– Intellectual Property (strengthened protection)– Access to Australian Government procurement– Investment access improved

AUSFTA vs NAFTAAUSFTA vs NAFTA

• Like NAFTA – Uses rules of origin and

calculations for regional value

• Unlike NAFTA– Onus on importer not

exporter– No prescribed certificate

form

Qualifying U.S. GoodsQualifying U.S. Goods

An Originating Good Must Be: 1. Wholly obtained or produced entirely in the United

States (e.g vegetables harvested in U.S.) 2. Produced in the United States wholly from other

originating materials from either Australia or the United States; or

3. Produced in the United States partly from non-originating materials, but meeting the requirements of the origin rules

Australia Financial ServicesAustralia Financial Services

• Total turnover in financial markets A$68.9 billion,

• Largest, most liquid stock market in Asia-Pacific, after Japan

• Australia's investment fund asset pool the largest in Asia, 4th largest in the world

• Funds under management reached A$839 (US$648) billion in March 2005; and will reach A$2.5 trillion by 2015.

OpportunitiesOpportunities

Australia

Infrastructure ProjectsMedical DevicesInformation Technology

ServicesConstruction MachineryOil and Gas Field MachineryWater Technologies

New Zealand

Infrastructure ProjectsPower Generation/ElectricitySupply Chain technologies

(RFID)Agricultural applicationsFood Processing and

Packaging

Agribusiness Opportunity – Agribusiness Opportunity – Fieldays 2007Fieldays 2007

• New Zealand Fieldays 115,000 visitors and 1,000 exhibitors.

• U.S. Pavilion• Event runs June 13 – 16, 2007

Hamilton, New Zealand• CS New Zealand’s Webinars• www.fieldays.co.nz

New Zealand AgricultureNew Zealand Agriculture

Other48%

Meat25%

Forest12%

Dairy15%

OtherMeatForestDairy

How to BeginHow to Begin

• Assess Market • Determine Modifications to Product

Business Model if Necessary• Determine Appropriate Scale• Market Entry Plan; Find Distributor• Promotional Opportunities (e.g. trade

shows)

Due Diligence AdvisedDue Diligence Advised

Contact UsContact Us

U.S. Commercial ServiceU.S. Consulate General19-29 Martin Place, 59 MLC CentreSydney NSW 2000http://www.BuyUSA.gov/australiaTel. 61-2-9373-9205 Fax. 61-2-9221-

0573