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United States of America Country Brief

Political

The United States is a liberal democracy with a federal political structure comprising 50 states and the District of Columbia. The federal government is characterised by a separation of the powers of the executive from the legislative and judicial functions. The constituent states have significant powers of self-government.

Heading the executive is a president elected every four years in a national contest by universal suffrage. Voting is state-based on a first-past-the-post basis. Each state is assigned seats equal to the sum of its electoral representatives in a 538-member electoral college. The president serves as head of state, commander in chief of the armed forces and head of the civil service.

The legislature, Congress, consists of the 100-member Senate and the 435-member House of Representatives. Senators are elected on a state basis and serve six year terms. Representatives are elected from single-member constituencies and serve two year terms. Congress has sole powers of making legislation and operates through a system of committees. Legislation must be approved by both chambers to become law. The president can veto legislation, but can be overridden by two-thirds majorities in both chambers.

The Supreme Court is the highest judiciary body in the United States and leads the judicial branch of the U.S. federal government. It consists of the Chief Justice of the United States and eight Associate Justices. The Justices are nominated by the President and confirmed by the Senate. The Court is the highest tribunal in the nation for all cases and controversies arising under the Constitution or the laws of the United States. It has the authority to invalidate legislation or executive actions which it deems to conflict with the Constitution.

The United States has two broad party coalitions, the Democrats and the Republicans. There is an absence of electorally viable third parties. The Democratic Party evolved from the party of Thomas Jefferson in the late 1700s. The Republican Party was formed by a coalition opposed to slavery led by Abraham Lincoln in the 1850s. Both parties embrace a wide variety of views and have supporters across the community.

George Walker Bush is the forty-third and current President of the United States of America. Bush was first elected in the 2000 presidential election, and reelected for a second term in the 2004 presidential election. The next Presidential election will be held in 2008.

Mid-term congressional and gubernatorial elections took place on 7 November 2006. All 435 United States House of Representatives seats and one third of the 100 United States Senate seats were contested in this election, as well as 36 state and two territorial governorships. The Democratic Party took control of both houses of the United States Congress with a 233-202 advantage in the House of Representatives, and a 51-49 advantage in the United States Senate. Democrats also won 6 additional Governorships while retaining all of their currently-held seats.

The 110th US Congress was sworn in on 4 January 2007. Nancy Pelosi (D-Ca) was elected as Speaker of the House of Representatives and Senator Harry Reid (D-Nevada) as Senate Majority Leader.

Bilateral Relations

Vital national interests are advanced through strong relations with the United States. As the world’s largest economy and strategic player, the US has a significant influence in international affairs. We engage with the United States closely and advocate our views across a very broad range of international issues. While Australian and American interests converge on a majority of international policy issues, we do not agree on all issues. Where this is case, Australia pursues its interests separately from the United States.

Defence and Security

A key pillar of relations between Australia and the United States is the ANZUS Treaty, signed in 1951. This treaty binds our two countries in mutual cooperation on military and security issues and contains a commitment that both Australia and the United States will act to meet common dangers.

Australia was one of the first countries to join the United States in the coalition to fight terrorism following the attacks on 11 September 2001. Australia invoked the ANZUS Treaty for the first time on 14 September 2001 to make a major contribution to combating terrorism.

The alliance is the foundation of defence and security cooperation between Australia and the United States. This cooperation increases Australia's ability to protect itself and its interests by providing access to extensive US intelligence resources, highly critical and sensitive and military technology, preferred status in military equipment purchasing, access to training courses and invaluable combined exercises.

Such cooperation supports joint efforts against terrorism and the proliferation of weapons of mass destruction. Australia believes the sustained engagement of the United States in the Asia Pacific provides support for regional stability and prosperity. Further information about the defence relationship is available on the Department of Defence website.

The Australian-United States Ministerial (AUSMIN) Consultations are held between foreign and defence ministers on a regular basis and are hosted alternately by Australia and the United States. AUSMIN 2008 was held in Canberra on 23 February and was attended by the Australian Minister for Foreign Affairs Stephen Smith, Australian Minister for Defence Joel Fitzgibbon, U.S. Secretary of Defense Robert Gates and U.S. Deputy Secretary of State John Negroponte. Ministers discussed Iraq and Afghanistan, the Pakistan elections, Iran’s nuclear ambition and progress in the Six Party Talks as well as security in the Asia-Pacific region among other issues. The Consultations provided an opportunity to demonstrate continuity in the alliance, share perspectives and approaches on major global and regional strategic issues, and deepen bilateral foreign security and defence cooperation. Key issues of discussion and outcomes from AUSMIN 2008 are outlined in the Joint Communiqué.

Other consultations among senior officials include the Trilateral Strategic Dialogue (with Japan), policy planning talks, political-military meetings and military-military talks.

Trade and Investment

Australia and the United States have a shared record of working together closely to promote global trade liberalisation for over 50 years. Australia has a vital interest in US policies on the international economy, trade and investment. We work effectively with the United States in the World Trade Organization (WTO) and pursue issues of common interest such as strategies to advance the Doha Round trade liberalisation agenda, especially in agriculture. Further information about the WTO is available on the Department of Foreign Affairs and Trade website.

The United States is one of Australia's most important economic partners. It is one of our top merchandise trading partners, our largest services trading partner and the major source of foreign investment. On 1 January 2005 the Australia-United States Free Trade Agreement (AUSFTA) extended Australia’s trade and investment relationship with the United States.

Our strong economic links do not mean that we agree on all trade issues. Indeed, Australia has a number of concerns about US trade barriers. In particular, the size of US farm assistance packages in recent years has caused much concern. The Australian Government pursues our interests at every opportunity. Many of our trade priorities have been addressed in the FTA and others we will continue to pursue bilaterally and in the WTO.

Australians are now able to apply for E-3 visas in order to live and work in the United States. The E-3 visa will help Australian business people and professionals capitalise on the opportunities offered under the Australia-United States Free Trade Agreement (AUSFTA). Australia and the United States also established a Work and Holiday visa arrangement which entered into force in September 2007.

Tourism, Culture and Education

Australia is a popular destination with American visitors - over 455,000 Americans visited Australia in 2006. The United States is a major destination for Australian visitors; over 440,000 Australians visited the United States during the same period.

Australian culture, from indigenous art to Australian films, continues to stimulate the interest of Americans. The ‘Australia Week’ program in 2007 expanded from G’Day LA to G’Day USA and celebrated its fifth year of success in showcasing all things Australian from trade and investment, food and wine, film, arts, fashion, lifestyle, to indigenous culture and tourism.

A growing number of Australian actors are taking on starring and award-winning roles on American movie and television screens. Australian creativity and expertise is being harnessed behind the scenes in areas such as cinematography and special effects. The cultural scene across America is enriched by Australian dancers, musicians, authors and artists.

People-to-People Links

Australia and the United States enjoy strong people-to-people links based on common values and our historical and cultural bonds. In September 2007 Australia concluded a Work and Holiday visa arrangement with the United States, further strengthening our strong relationship and people-to-people links. The visa allows eligible Australians to stay and work for 12 months in the United States.

The United States Studies Centre at the University of Sydney, which was co-founded with the Australian American Association and supported with a federal government grant of $25 million in 2006, will deepen Australian knowledge and understanding of the United States, and strengthen the underlying links between people and institutions in the two countries.

In 2001, the Department of Foreign Affairs and Trade announced its sponsorship of a Fulbright Professional Award in Australia-US Alliance Studies. The Award, administered by the Australian Fulbright Commission, is aimed at further developing our bilateral ties through the study of contemporary issues of interest to both Alliance partners.

The Australian American Leadership Dialogue is a bipartisan annual private initiative between Australia and the US. The Leadership Dialogue brings together leaders of enterprise, government, media and the community from both countries to focus on the strategic parameters of the bilateral relationship.

Major Recent Bilateral Agreements

AUSFTA

The Australia-United States Free Trade Agreement (AUSFTA), which entered into force on 1 January 2005, is a bilateral agreement with the world's largest economy and one of Australia's most important trading and investment partners. Over time, this comprehensive agreement will increase bilateral investment and trade and provide more jobs and improved living standards for both countries. While there will always be healthy competition between Australian and American businesses, the FTA delivers dynamic gains which promise to yield important long-term gains both for Australia and the United States. Further information about the FTA is available on the Department of Foreign Affairs and Trade website and at www.fta.gov.au.

For further information see “Australian Trade and Investment Strategies”

Bilateral Social Security Agreement

The Australian and United States Governments have also signed a bilateral social security agreement to give improved social security protection to people who have lived and/or worked in both Australia and the US. The social security agreement also exempts Australian employers from the need to provide American social security support for Australian employees sent temporarily to work in the Unites States. See the ATO website for further information.

High Level Visits

Prime Minister Kevin Rudd visited the United States from 27 March to 1 April 2008. Mr Rudd met with President Bush and other senior members of the Administration, as well as with business leaders. He addressed the US Chamber of Commerce and the Brookings Institute in Washington to highlight key elements of Australia’s foreign, trade and economic platform. Mr Rudd also held discussions at the United Nations in New York, highlighting the importance the Australian Government attaches to multilateral engagement. During the visit, Mr Rudd witnessed the signing of an “Open Skies” air services agreement between Australia and the United States and also agreed to the establishment of a financial regulations arrangement to enhance capital flows between the two economies.

In January 2008, Foreign Minister Stephen Smith visited the United States. During his visit to Washington, Mr Smith met with senior members of the United States Administration, including Vice President Dick Cheney, Secretary of State Condoleezza Rice, and Secretary of Defense Robert Gates. Mr Smith also attended President Bush’s State of the Union Address. Mr Smith discussed a range of global and regional security challenges Australia shares with the United States. He also travelled to New York to meet key figures at the United Nations to explore ways to strengthen Australia’s contribution to the work of the United Nations. While in New York, Mr Smith also attended several G’Day USA (Australia Week) events, and participated in a financial services working lunch to promote Australia as a sophisticated trade and investment partner.

The Minister for Trade, Simon Crean, visited the United States in January-February 2008 to promote Australia’s highest trade policy priority – a successful outcome from the Doha Round of trade talks at the World Trade Organization. In Washington Mr Crean met with US Trade Representative, Susan Schwab, and other senior Administration and Congressional representatives. In addition to discussing the US’s outlook on the Doha Round, he registered Australia’s desire to see reform of US agriculture support through the next US Farm Bill and also Australia’s commitment to developing our significant trade and investment relationship.

President Bush’ last visit to Australia was in September 2007, when he attended the APEC Summit. President Bush’s visit resulted in a number of significant bilateral agreements and outcomes, including a Treaty on Defence Trade Cooperation and a Memorandum of Understanding on work and holiday visas which will enhance people-to-people links. US Secretary of State Condoleezza Rice also visited Australia in September 2007 to take part in the APEC meetings. Secretary of Defense Robert Gates and Deputy Secretary of State John Negroponte visited Australia in February 2008 to attend the Australia-United States Ministerial Consultations (AUSMIN).

Economic Overview

The United States is by far the world's largest economy. US GDP is over US$13.2 trillion (2006) and represents around one quarter of global GDP. The United States is a major driver of the global economy, and is number one in the world in terms of international trade and investment, research and development expenditure, stock market capitalisation and its share of large global corporations.

Information about the United States economy and economic outlook is widely available and constantly updated.

The latest official economic indicators are available at:

United States macroeconomic reports

The Federal Reserve Summary of Commentary on Current Economic Conditions - (commonly known as the Beige Book) is published eight times per year and summarises comments received from businesses and other contacts outside the Federal Reserve on current economic conditions.

OECD published information on the United States

Bilateral Economic and Trade Relationship

The United States is Australia's most important economic partner country. It is our third largest two-way trading partner in goods and services and our major source of foreign direct investment. It is a vital component of our economic security.

The Australia-United States Free Trade Agreement (AUSFTA) strengthens what was already a significant trade and investment relationship. Upon entry into force on 1 January 2005

For the first time, Australian companies have access to the A$200 billion federal government procurement market in the United States

In 2006 Australia's merchandise exports to the United States rose by 8.7 per cent to $10.1 billion. Australia's services exports in 2006 were $A5.5 billion, an increase of 10.6 percent. Australia’s exports of goods and services to the United States rose by 9.4 per cent to A$15.6 billion in 2006.

The United States is our largest source of foreign investment. The United States is also Australia’s largest destination country for foreign investment abroad.

Export Opportunities

The US market is home to around 4 per cent of the world's population and comprises 50 states and 1 federal district. It is the fourth largest country in terms of geographic area and covers four time zones - six including Alaska and Hawaii. The United States should be treated as a series of regional markets with varying characteristics. California, for example, has the fifth largest economy in the world.

The United States is a major market for Australian exporters and is the leading destination for Australian overseas investment. With the exceptions of a few import quotas and some strategic industry ownership restrictions, there are no limitations on foreign firms seeking to do business in the United States. The United States has Federal laws applicable throughout the entire country and state laws which are passed by individual states, with both sets applying in the business world. With its stable political system, strong economy and sizable consumer market, the United States is a prime location to do business.

Changes in Trade and Investment Conditions

Trade

See The United States of America's trade policy - the World Trade Organization's trade policy review report for information on market access restrictions in the US market.

Investment

Although the United States operates foreign investment restrictions in some sectors of the economy (airline ownership, telecommunications, and radio services) foreign investors are generally treated on an equal footing with domestic business. There are no restrictions on moving capital in or out of the United States (or between States) or on the repatriation of profits.

A protocol amending the double taxation convention for Australia and the United States entered into force from July 2003.

TradeWatch Contacts

If you would like more information on the trade and economic conditions in United States of America, please email the Department of Foreign Affairs and Trade.

Trade Successes

Australian export success at Trademark

Last updated: 20/02/2008