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The United States-Australia Free Trade Agreement (FTA) has served as the basis of our bilateral trade relationship since the agreement entered in force on January 1, 2005. (See U.S.-Australia FTA page) Under the FTA, all tariffs have been eliminated for imported products from the United States into Australia. The FTA has functioned generally smoothly, with trade and investment growing in both directions. Since the FTA went into force, U.S. goods exports to Australia have grown 59 percent and U.S. services exports have more than tripled.
During this period, the U.S. bilateral goods trade surplus has doubled to $13 billion and the U.S. bilateral services trade surplus grew five-fold to $15 billion. In 2016, Australia was our 24th largest goods trading partner. Top U.S. export categories for goods were machinery, vehicles, aircraft, optical and medical instruments, and electrical machinery. U.S. exports of agricultural products to Australia, our 20th largest agricultural export market, totaled $1.3 billion in 2016. Leading domestic export categories included pork and pork products, prepared food, fresh fruit, dairy products, and dog and cat food. The stock of U.S. foreign direct investment (FDI) in Australia was $167.4 billion in 2015 (latest data available), a 5.4 percent decrease from 2014. The stock of Australia's FDI in the United States totaled $42.3 billion in 2015 (latest data available.
The United States is Australia’s third largest goods trading partner, after China and Japan. In addition to our FTA, Australia has FTAs with China, Japan, Korea, India, New Zealand, and the ten ASEAN countries. Australia also is participating in the Trans-Pacific Partnership and the 16-member Regional Comprehensive Economic Partnership negotiations, as well as with the EU, its largest source of foreign investment and second largest trade partner as a bloc.