USA: Global economic superpower
The US economy has recorded 26 quarters of uninterrupted growth, creating unprecedented opportunities for dynamic Australian businesses.
Approaching eight consecutive years of uninterrupted economic growth, the US economy continues to expand despite significant global headwinds. It is predicted to outpace its developed economy peers in 2016 and again in 2017, including the UK, Germany and Singapore.
Already our largest investment partner, the US recently overtook Japan to become Australia's second largest trading partner. The US economy is witnessing solid growth across industries where Australian businesses are highly competitive. From energy to agriculture to digital technology, there is unprecedented opportunity for dynamic Australian businesses.
In energy, spurred by innovation in hydraulic fracturing technologies, the US has added the equivalent of over 4.2 million barrels of oil per day to the global market over the past five years. Despite falling energy prices, output has continued to grow, making the US the world's largest oil and gas producer. The renewable energy sector continues to thrive. In 2014, the US installed as much solar power capacity every three weeks as it did in all of 2008. As the Obama Administration pursues a 32 per cent reduction in carbon dioxide levels by 2030, opportunities in the sector will continue to flow.
Despite slowing agricultural exports, US agricultural imports are expected to grow, driven by changing consumer preferences. In 2014 alone Australia's beef exports to the US increased 87 per cent due to increasing demand for grass-fed beef and a harsh Californian drought. While beef exports have slowed in recent months, US consumer demand for high quality agricultural produce (including high quality meat and organic foods) continues to grow sharply, providing more opportunities across the board for Australian farmers.
The digital technology sector in the US is arguably the world's best and is thriving. Nurtured by an ecosystem of abundant capital, extensive R&D and a risk-taking culture, the US digital technology sector accounts for a greater proportion of GDP than the entire US retail sector. As the economy digitizes rapidly, opportunities will continue to emerge. Already, innovative Australian companies such as Atlassian (a world leader in enterprise software) are taking advantage. Originally from Sydney, the company's IPO on the NASDAQ in December valued it at close to US$6 billion.
The size, quality and success of February's Australia-United States Business Week is testament to the strong reputation of Australia in the US and our growing business links. I was particularly impressed by the interest and participation from top-tier US firms, including PepsiCo, GE, Chevron and Johnson & Johnson. Another highlight of Business Week was the opening of the Australian Government Landing Pad in San Francisco. The Landing Pad will help Australian business grow and develop by providing them access to a short-term operational base in the world's most innovative region - San Francisco and Silicon Valley.
One of my top priorities as Ambassador is advocacy of the Trans-Pacific Partnership, a 12-country trade agreement, representing around 40 per cent of the global economy. As the world economy continues to change, the Agreement will give Australian companies a leg up in the competitive US market. There is nowhere that this will be more important than in access to US-run global value chains. With inputs for goods and services increasingly sourced from multiple countries, many US products are the result of far-reaching Global Value Chains, including the Boeing 787 Dreamliner and the Apple iPhone. The Trans-Pacific Partnership will create unparalleled opportunity for Australian business to secure positions in US-managed Global Value Chains.
Australia's increased focus on innovation under the National Innovation and Science Agenda, dovetails well with the extensive innovation taking place at all levels of the US economy. The Agenda is helping to forge pathways for Australian business and researchers to collaborate with their US counterparts, including through events such as G'day USA, Australia-US Business Week, the San Francisco Landing Pad and linkages with incubators such as Washington DC's "1776".
Since my arrival to the US in January, I have been struck by the warmth that Americans at all levels have for Australia. Our country enjoys a reputation in the US which is the envy of many others. The friendship between our two nations runs deep, with Australia the only country to have served with the US in every major conflict over the past 100 years. Our people to people links are strong and expanding, as witnessed by the 15 per cent rise in visitor arrivals to Australia from the US in 2015. Our business links are strengthening, highlighted by the tenth anniversary of the Australia-US Free Trade Agreement last year and our burgeoning trade and investment ties. At a government level, I was delighted to hear directly from President Obama the value which he places in our bilateral relationship when I received my credentials earlier this year. As I travel across the country meeting with businesspeople, governors and members of Congress, I am constantly reminded of the strength and depth of our relationship.
But we cannot take our relationship for granted. Our high performing network of consulates and the Embassy are working hard to further our bi-lateral links every day. The strength of the US-Australia relationship presents Australian business with a unique opportunity to get a foot in the door in one of the world's most dynamic, innovative and expansive markets. With a favourable exchange rate, a growing economy and low interest rates, there has never been a better time to do business with the US.