Australia is a vital ally, partner, and friend of the United States. Our two countries have maintained a steadfast relationship underpinned by shared democratic values, common interests, and cultural affinities. Economic, academic, and people-to-people ties are vibrant and strong. Our partnership promotes peace and stability in the Indo-Pacific region and around the world. The United States and Australia marked the 80th anniversary of diplomatic relations in 2020.
Bilateral defense ties and cooperation are exceptionally close. U.S. and Australian forces have fought side-by-side for more than one hundred years, in every major conflict since World War I, beginning with the Battle of Hamel in 1918. In 2022, the United States and Australia marked the 80th anniversary of several key World War II battles, including the Battles of the Coral Sea, Midway, and Guadalcanal. This year marks the 72nd anniversary of the signing of the ANZUS Treaty. The only time the collective defense article of the ANZUS Treaty was formally invoked was after September 11, 2001. The Australian parliament swiftly passed a bipartisan motion offering Australian support after the attacks on that terrible day.
Since then, the two countries have taken additional steps to pave the way for closer defense and security ties. These have included the annual rotation of Marines to Darwin, which completed a twelfth year of exercises in 2023, and enhanced rotations of U.S. Air Force aircraft to Australia. Additionally, they signed the U.S.-Australia Force Posture Agreement at the annual Australia-United States Ministerial Consultations (AUSMIN) in August 2014. In October 2015, the U.S. and Australian defense agencies also signed a Joint Statement on Defense Cooperation to guide future cooperation. Finally, in 2021, the United States and Australia led their ninth Talisman Saber, a biennial joint military exercise designed to ensure and demonstrate the ability of the two defense forces to work together with the highest levels of interoperability.
The United States and Australia share a strong interest in maintaining freedom of navigation, overflight, and other lawful uses of the sea, including in the South China Sea. Australia and the United States engage in a trilateral security dialogue and infrastructure partnership with Japan, and collaborate with Japan and India in the Quad, to solve the region’s most pressing crises. In March 2023, Australia, the United Kingdom, and the United States announced an arrangement for Australia to acquire a conventionally-armed, nuclear-powered submarine (SSN) capability through the Australia-United Kingdom-United States (AUKUS) enhanced security partnership. AUKUS aims to provide Australia with a conventionally armed, nuclear powered submarine capability as soon as possible, while upholding the highest non‑proliferation standards. The partnership will develop and provide joint advanced military capabilities to promote security and stability in the Indo-Pacific region. Arms control and counter-proliferation is another area of close U.S.-Australia cooperation.
The United States and Australia share a long history of cooperation in other areas as well. In 1949, the United States and Australia signed an agreement that established the Fulbright program. Since then, more than 5,000 Australians and Americans have received Fulbright scholarships. The United States and Australia have concluded a mutual legal assistance treaty to enhance bilateral cooperation on legal and counter-narcotics issues. The two countries have also signed tax and defense trade cooperation treaties, as well as agreements on health cooperation, space, science and technology, emergency management cooperation, and social security. Many U.S. institutions conduct cooperative scientific activities in Australia. The United States and Australia responded to the COVID-19 pandemic, including through the Quad Vaccine Partnership (Australia, India, Japan, and the United States) and the COVID-19 Global Action Plan. The United States and Australia have also worked together to support Global Health Security Agenda efforts to prepare for and respond to future pandemics and infectious disease threats.
U.S. Assistance to Australia
The United States provides no development assistance to Australia but does coordinate closely on development assistance policy in the Indo-Pacific region and globally.
Bilateral Economic Relations
The United States is Australia’s most important economic partner, with U.S. trade and investment contributing seven percent of Australia’s annual economy. The United States is Australia’s largest foreign investor by far, providing much of the capital which has driven the Australian economy over the last three decades. The United States is also Australia’s third largest trading partner. More than 1,000 American companies lead investment in resources, financial services, aerospace, and knowledge-based industries, employing 320,000 Australians at wages well above the national average and helping develop advanced technologies and a highly skilled workforce. The United States is also the top destination for Australian investment overseas, creating almost 100,000 high-quality American jobs.
The U.S.-Australia Free Trade Agreement (FTA) entered into force on January 1, 2005. U.S. goods and services exports to Australia increased by almost 90 and 100 percent respectively since 2004 (pre-FTA) owing in large part to the FTA. In 2021, total U.S. goods and services trade with Australia totaled US $61.1 billion, and the United States ran a trade surplus of US $24.3 billion. Leading U.S. goods exports are machinery, vehicles, and optical and medical instruments. Leading U.S. services exports are financial services; telecommunications, computer, and information services; and licenses for computer software. Top U.S. goods imports from Australia are meat, precious metals and stones, and optical and medical instruments. Top services imports from Australia include professional and management services, financial services, and technical and other services. Australia has proven to be an appealing and profitable market for U.S. companies for many years, owing to its low barriers to entry, familiar legal and corporate framework, and a sophisticated yet straightforward business culture.
Two-way foreign direct investment (FDI) cumulatively totals nearly $261.5 billion. In 2020, Australia total stock of FDI into the United States was $98.0 billion. Leading sectors for Australian investment into the United States are manufacturing, professional, scientific, and technical services, and finance and insurance. According to Australian government statistics, the United States is Australia’s largest foreign investor. In 2020, the U.S. FDI position in Australia (outward) was $163.5 billion. U.S. FDI in Australia is led by nonbank holding companies, finance and insurance, and manufacturing. Considerable portfolio investment in both directions also contributes to a strong bilateral investment relationship. U.S. firms have operated in Australia for more than 100 years and according to Australian government estimates currently employ more than 300,000 Australians, many in high-paying sectors. U.S. firms are also the largest taxpayers, wage payers, and contributor to GDP of any foreign country companies operating in Australia.
The private sector in Australia and the United States are aligned with the climate transition: The Net-Zero Banking Alliance membership includes three of the largest U.S. banks – Citi, Morgan Stanley, and Bank of America – that alone account for $6.5 Trillion of assets. And we were not surprised to see that Australia’s Macquarie Bank has committed to phasing out coal finance by 2024. This will accelerate the current trend towards good-paying union jobs in the industries of the future, including renewables, where Australia is a world-leader in deployment.
Australia and United States share strong people-to-people ties. U.S. government funded exchange programs between the people of the United States and the people of Australia include the Fulbright program, the International Visitor Leadership Program (IVLP), sports diplomacy and cultural exchanges, and programs to counter disinformation.
Australia’s Membership in International Organizations
Australia and the United States belong to several of the same international organizations and fora, including the United Nations, ASEAN Regional Forum, Asia-Pacific Economic Cooperation (APEC), G-20, International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD), World Bank, and the World Trade Organization (WTO). Australia is a Partner for Cooperation with the Organization for Security and Cooperation in Europe (OSCE), an Enhanced Opportunities Partner of the North Atlantic Treaty Organization (NATO), and a member of the Pacific Islands Forum.
Source : State.Gov