Australia and the US signed a free trade agreement (FTA) in January 2005. While many Australians have been critical of the agreement, and many Americans unaware that such an agreement even exists, according to The Australian, the agreement is working — for both sides; specifically the Australian workforce and the US investment community.
A key provision of the agreement was the relaxation of the threshold requirements for US investors to seek Foreign Investment Review Board approval before investing in Australia.
The results are clear.
According to the latest Australian Bureau of Statistics data, total US investment in 2005 was just shy of $334bn and has increased by an average of $20bn a year, reaching $418bn by the end of 2008.
US investment into Australia has “helped foster industries of the future” — and create jobs for Australians as well as help Australia ride out the global financial crisis. (Americans may find this last point interesting, to say the least.)
Meanwhile, the FTA has brought tens of thousands of Australians into the US on the two-year, indefinitely renewable E-3 work visa, one of the most preferential work visas on the block.
America continues to rely on foreign workers to fill gaps in its workforce, particularly in the high-tech sector. The H1-B visa cap is often cited as problematic by the tech industry in how it limits the number of skilled workers that can enter the US each year. The E-3 gives Australians a leg up on this competition.
And, again, while some Australians complain that the E-3 will lead to a “brain drain”, the idea is that the experience Australians gain while working in the US will be put to good use when these skilled workers return home and apply their knowledge to existing Australian companies, or start up new businesses. Doubters need to look no further than how the H1-B cap and economic downturn in the US has forced many Chinese and Indian workers from Silicon Valley to return home in the past year and the upturn in those economies and local industries.
To read the rest of the results of the Australia-US FTA, “Free Trade Brings Heaps of Benefits”, click here. To learn more about other US free trade agreements, click here.