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Australia and New Zealand

Australia and New Zealand. Business Prospects. Keith Kirkham – A/Senior Commercial Officer CS Australia/NZ. Outline. The Good Story The AUSFTA Some Key Opportunities in Australia and New Zealand How to Begin. Differences Obvious & Subtle. Counter-seasonal

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Australia and New Zealand

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  1. Australia and New Zealand Business Prospects Keith Kirkham – A/Senior Commercial Officer CS Australia/NZ

  2. Outline • The Good Story • The AUSFTA • Some Key Opportunities in Australia and New Zealand • How to Begin

  3. Differences Obvious & Subtle • Counter-seasonal • Multicultural with European patterns • Indigenous Supply • Influence in the Region

  4. Misconceptions

  5. This Country Is a Continent

  6. Australia Population Density • Australia is the 7th most urbanized country in the world. More than 80% of population in this ring

  7. The Good Story • Strong, Resilient Economy • Ease of Doing Business • Purchasing Power • A-US Free Trade Agreement

  8. The Economy • 15th year expansion • Low Inflation/Low unemployment • High Capacity Utilization and Capex • Forecast 3.25% growth

  9. 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

  10. The Market Drivers: Australia • Commodity Prices: strong Asian demand • Infrastructure spending to add capacity • Trading partner growth

  11. Role of Resources

  12. Aus Mining Capacity

  13. Aus Adding Capacity

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

  15. “Suddenly, I’m Thirsty…”

  16. Market Drivers: New Zealand • Commodity Prices (e.g. dairy) • F/X • Trading Partners’ Economies • In Migration • Tourism

  17. New Zealand Risks • Oil prices • Strong NZ $ drags export economy • Highly Leveraged consumers shift demand from consumer to industrial spending

  18. Australia Risks • Oil prices • Continued Drought • Labor shortage/wage inflation

  19. Strong 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

  20. Ease of Doing Business • Sophisticated Market • World Class infrastructure • Politically stable • Excellent IPR regime • Transparent processes • Technology intensive

  21. Purchasing Power

  22. Purchasing Power: Getting Richer 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)

  23. Australia-U.S. Free Trade Agreement 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

  24. AUSFTA vs NAFTA • Like NAFTA • Uses rules of origin and calculations for regional value • Unlike NAFTA • Onus on importer not exporter • No prescribed certificate form

  25. Qualifying U.S. Goods An Originating Good Must Be: • Wholly obtained or produced entirely in the United States (e.g vegetables harvested in U.S.) • Produced in the United States wholly from other originating materials from either Australia or the United States; or • Produced in the United States partly from non-originating materials, but meeting the requirements of the origin rules

  26. Australia 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.

  27. Australia Infrastructure Projects Medical Devices Information Technology Services Construction Machinery Oil and Gas Field Machinery Water Technologies New Zealand Infrastructure Projects Power Generation/Electricity Supply Chain technologies (RFID) Agricultural applications Food Processing and Packaging Opportunities

  28. Agribusiness Opportunity – Fieldays 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

  29. New Zealand Agriculture

  30. How 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)

  31. Due Diligence Advised

  32. Contact Us U.S. Commercial Service U.S. Consulate General 19-29 Martin Place, 59 MLC Centre Sydney NSW 2000 http://www.BuyUSA.gov/australia Tel. 61-2-9373-9205 Fax. 61-2-9221-0573

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