Italy and Australia are connected by historical ties and share significant trade relations in various sectors, with a substantial flow of exports from Italy to Australia exceeding 4 billion euros.
Both highly developed G20 economies, Australia and Italy currently boast a good level of commercial interaction and, above all, ample prospects for improvement. However, the COVID-19 pandemic led to a significant contraction in trade between the two countries in 2020-2021. Nevertheless, trade values have steadily increased, reaching 4.443 billion euros in 2021 and 5.818 billion euros in 2022. Although imports of Australian goods to Italy doubled in 2022 compared to 2021, the trade balance remains significantly in Italy's favor, with 4.7 billion euros of exports in 2022.
Italy ranks second among the main European supplier countries to Australia in 2022, preceded by Germany and followed by the United Kingdom, France and Spain. Recent data indicate a return to pre-pandemic trade levels or even exceeding them.
Italian foreign direct investment in Australia is naturally lower than trade volumes and is focused primarily in the energy, natural resources and infrastructure sectors, where Australia holds a leadership position, as well as in fashion, luxury goods and food products. However, exporting companies to Australia face significant market access restrictions and a quota system that particularly affects the agri-food sector.
In recent years, there has been a remarkable increase in Australian activities and investments in various sectors in Italy, including real estate, infrastructure, pharmaceuticals and financial services.
Australia represents one of the world's soundest economies, with a GDP per capita of USD 66,000. It experienced uninterrupted growth for 28 years before the COVID-19 pandemic. Since 1992, Australia has registered the highest expansion among advanced economies. After a brief interruption in 2020, Australia resumed growth, benefiting from substantial government incentives and international demand for mining exports, which translated into a 4.9% GDP increase in 2021 and 3.8% in 2022.
Australia's AAA sovereign risk profile, its security and its position as a meeting point between East and West make it an ideal partner for trade, investment and collaboration. Australia is renowned for its abundant resources.
Australian exports of energy and resources make up over three quarters of total exports and are expected to reach a record value of AUD 459 billion in 2022-23. Currently, Australia holds the world's largest reserves of iron ore, gold and uranium, is the leading global lithium producer and has substantial reserves of rare earth minerals. Australian exports of liquefied natural gas, coal and uranium make it an important energy supplier for Asian economies. High quality Australian agricultural products are highly valued by global consumers, as is tourism, education, wealth management, healthcare and professional services.
According to the World Bank, Australia provides extensive guarantees to foreign investors, ranking 7th globally for ease of doing business, 6th for contract enforcement and 4th for getting credit. It also ranks very high for corporate legislation, procedural clarity, digitization and streamlined business services. Foreign direct investment remains an integral part of the Australian economy, contributing to prosperity through financing new industries, infrastructure development, increased productivity, export market access, economic activity stimulation and job creation. Australia's stable democracy underpinned by rule of law, a skilled workforce with links to Asian markets and a network of trade agreements and trade policies create a conducive environment for business activities. During the global economic recovery, these features make Australia an attractive investment destination.
A noteworthy feature of Australia is indeed its regulatory and institutional framework, which emphasizes simplicity and transparency in relationships, including at the institutional level. This contrasts with Italy, where the regulatory and legal landscape is complex, fragmented, often unclear and contradictory. For example, regulations for many activities can vary between municipalities or regions. Moreover, bureaucracy prevails in interactions with public administration. These differences can pose communication challenges, underscoring the importance of building relationships with Australian clients based on trust and transparency.