Agreements and Frameworks

At the multilateral level, Australia’s services trade operates under global rules including the World Trade Organisation’s General Agreement on Trade in Services (GATS), which sets principles of non-discrimination and market access for international services trade. Australia supports further liberalisation through WTO initiatives such as the Joint Statement Initiative on Services Domestic Regulation to reduce red tape for service providers. Beyond the WTO, Australia engages in forums like APEC, the G20, and the OECD to promote open and transparent services markets.

Free Trade Agreements (FTAs) are a cornerstone of Australia’s strategy to facilitate services trade and investment. Modern FTAs typically include dedicated chapters on services and investment, reducing barriers and ensuring fair treatment for service suppliers and investors. Australia has FTAs in force with many of its key trading partners – for example, the Australia-United States FTA (AUSFTA), the China-Australia FTA (ChAFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and recent agreements with the United Kingdom (A-UKFTA) and India (AI-ECTA). These agreements enhance market access for Australian services and improve protections for foreign investors.

Trade

Exports

Services exports are a vital and growing part of Australia’s trade portfolio. In 2024, total services exports reached $126.38 billion. The largest export category is travel services, which includes spending by overseas visitors and students in Australia. Travel exports amounted to $78.5 billion in 2024, or about 62.1 percent of all services exports. Education-related travel, including tuition and the living expenses of international students, is the dominant component, accounting for roughly two-thirds of travel export earnings. At $51.5 billion in 2024, education services remain Australia’s top service export, reflecting the country’s popularity as a destination for international education. Other important service exports include professional and technical services, financial services, transport services, and charges for the use of intellectual property. For instance, exports of intellectual property rose nearly 20 percent in 2024, underscoring growing overseas demand for Australian innovations and content.

In terms of export destinations, Asia and North America lead. China is Australia’s largest market for services exports, accounting for about 13.3 percent of total services export value in 2024. The United States is the second-largest market, at roughly 12.4 percent of services exports, with key exports including business services, tourism, and financial services. Other significant export destinations include India, which has grown as a source of students and IT service demand, and traditional partners like the United Kingdom, New Zealand, and various ASEAN countries.

 Top 5 export destinations:

1.     China: $18.2 bn (13.5%)

2.     United States: $18 bn (13.4%)

3.     Asia: $14.0 bn (10.4%)

4.     India: $11.1 bn (8.3%)

5.     United Kingdom: $9.2 bn (6.8%)

Imports

Australia is also a major importer of services, with outbound tourism, transport, and intellectual property payments contributing heavily. In 2024, Australia’s services imports were about $164.6 billion, exceeding exports and reflecting Australians’ demand for international travel and foreign services. Travel (outbound tourism) is the single largest component of these imports, which climbed to $69.1 billion in 2024 following the pandemic. Other services, which encompasses a range of business services, royalties, licenses, and other intellectual property usage fees, totalled ~$67.9 billion in 2024. Transport services, including international freight, aviation, and shipping fees, make up the remainder of imports at around $27.6 billion, as Australia relies on global logistics providers for trade and travel.

 The United States is by far the largest source of Australia’s services imports, reflecting its role in providing many high-value services to Australia. In 2024, about 25.2 percent of Australia’s imported services came from the US. This substantial share is driven by a combination of Australians traveling to the US, as well as imports of American financial, entertainment, and technology services. Other important partner countries for service imports include the United Kingdom, New Zealand, and Indonesia. The UK supplies services such as business and professional services and is a common travel destination for Australians. New Zealand and Indonesia rank high largely due to tourism flows – New Zealand for its close people-to-people links, and Indonesia as a popular holiday destination for Australians.

 Top 5 Services Import Countries:

1.     United States: $44 bn (25.6%)

2.     New Zealand: $11.3 bn (6.6%)

3.     United Kingdom: $11.2 bn (6.5%)

4.     Indonesia: $10.7 bn (6.2%)

5.     Asia: $8.7 bn (5.1%)

Investment

Inbound Investment

Foreign direct investment (FDI) in Australia’s services industries plays a crucial role in development and job creation, just as Australian companies invest abroad in service sectors. After mining, the second largest recipients of FDI are services industries. Notably, Australia’s financial and insurance sector attracted roughly $160.9 billion of FDI stock (12.6 percent of the total) by 2024, reflecting substantial foreign stakes in banking, insurance, and funds management. Other major service industries with considerable foreign investment include wholesale and retail trade ($75.0b), information and communications ($53.9b), and transport and logistics ($37.9b). This pattern indicates that Australia’s open economy and stable business environment attract overseas investors not only to resources, but also to its advanced services economy. These inflows bring capital, technology, and expertise, and are facilitated by Australia’s investment-friendly policies and commitments in trade agreements that protect investors’ rights.

Outbound Investment

Australian companies are significant global investors in service industries. By 2024, Australian direct investment abroad reached roughly $1.2 trillion. Much of this outbound investment is concentrated in service sectors such as finance, banking, and insurance, as Australian financial institutions and funds have a strong presence overseas. Other developed economies, such as the United States, United Kingdom, and European Union together account for about 62 percent of Australia’s total investment abroad. These regions attract Australian capital into sectors like banking, professional services, technology, and utilities.

In summary, Australia’s international trade and investment in services is a substantial and dynamic component of its economy. The country exports a wide array of services, from education and tourism to financial and professional services, with total exports recovering strongly following the pandemic to around $126 billion in 2024. Imports of services (about $165 billion in 2024) are even higher, driven by Australians’ enthusiastic outbound travel and reliance on overseas expertise and intellectual property.

For readers seeking further information, recommended sources include the ABS’s International Trade Statistics for 2024-25, and the OECD’s report on Australian Services Trade in the Global Economy.