Also in this issue:

USA: Global economic superpower

The Hon Joe Hockey, Australian Ambassador to the USA – p3

Cables from postDispatches from Australia’s

global diplomatic network — p4

Sustained growth in the world’s most

innovative economy By DFAT and Austrade officers

at US posts – p8

Cyber Security at Australia US Business Week by Michaela Browning,

General Manager Established Markets, Austrade – p15

Connecting DFAT’s diplomatic network to Australian business

Further strengthening Australia-US trade relationsMinister for Trade, Tourism and Investment The Hon Steven Ciobo MP

Welcome to a new edition of business envoy.

This edition focuses on the United States.

The United States represents one of Australia’s most important economic relationships and one that continues to grow.

It is the world’s largest economy, an innovation superpower and our largest investment partner.

The US market presents Australian businesses with boundless opportunities. It has one of the world’s most liberal foreign investment regimes with Australian companies looking to invest in the United States facing few barriers.

Similarly, barriers to the entry of Australian goods and services into the US market are relatively few.

DEPARTMENT OF FOREIGN AFFAIRS AND TRADE AUGUST 2016

The Turnbull Government is seeking to grow our trade and investment relationship with this important economic partner through a range of initiatives.

The complementary Australia US Business Week and G’Day USA programs highlight our credentials as an innovative and advanced economic partner.

We have expanded our support for Australian business on the ground by opening a Consulate- General in Houston in 2015 and recently establishing a new investment promotion office in Boston.

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Department of Foreign Affairs and Trade

Contents

Further strengthening Australia-US trade relations

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USA: Global economic superpower

3

Cables from post Dispatches from Australia’s global diplomatic network

4

Sustained growth in the world’s most innovative economy

8

Australia in the United States

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G’DAY USA Emerging Innovators Xchange

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Chicago: a trading powerhouse

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Aussie entrepreneurs touch down at our Landing Pad in San Francisco

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Cyber Security at Australia US Business Week

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Medtech – A US market on the move

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Investment benefits under the TPP

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Further strengthening Australia-US trade relationsMinister for Trade, Tourism and Investment The Hon Steven Ciobo MP

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In January this year, I met with US Trade Representative Michael Froman and other US political leaders to discuss how we can further strengthen our trade and investment relationship, including by seizing some of the commercial opportunities outlined in this edition.

One of the key topics of conversation was the Trans-Pacific Partnership, the largest regional trade deal negotiated in more than 20 years.

It is an historic agreement that will further integrate Australia into the fast-growing Asia-Pacific region.

The TPP will create new market access opportunities for Australian exporters and new investment opportunities, driving Australian jobs and economic growth.

It will establish a more seamless trade and investment environment across 12 countries and address contemporary trade challenges.

Globally, it has been a tumultuous few months since the last edition of business envoy in May.

The outcome of the Brexit vote in the United Kingdom has seen investors react with caution as they consider the potential impacts of a UK withdrawal from the European Union.

In the coming weeks, a special edition of business envoy will focus on what Brexit means for Australian business and our trading relationship with both the United Kingdom and the European Union.

The Turnbull Government is committed to open markets and promoting global trade. Our history has shown us that opening Australia to global markets overwhelmingly benefits Australia as a whole.

Australia’s trade and investment policies have played an important role in sustaining the country’s 25 years of uninterrupted growth.

Today, trade in goods and services is equivalent to more than 40 per cent of Australia’s GDP and one in five Australian jobs is tied to trade.

As the Minister for Trade, Tourism and Investment, I will actively seek to explain and advocate the benefits of open markets, which have helped grow our national

prosperity, contributed to our economic growth and created new Australian jobs.

I encourage you to join me.

World Bank analysis found countries that liberalised their trade regimes experienced average annual growth rates that were around 1.5 percentage points higher than before liberalisation.

Increasing trade and investment is at the heart of the Turnbull Government’s plan to create jobs and support economic growth.

The Turnbull Government will pursue an ambitious trade agenda to grow our exports, attract new investment and increase visitor numbers – ultimately creating more jobs.

We will take further steps toward implementation and ratification of the TPP.

We will work to conclude trade agreements with Indonesia, India, Regional Comprehensive Economic Partnership countries, members of the Gulf Cooperation Council, and Pacific Island countries through the PACER Plus agreement. We will continue our work towards launching free trade agreement negotiations with the European Union and seek to open negotiations with the United Kingdom at the right time. We will explore the feasibility of trade negotiations with Colombia and pursue new opportunities in the Indo-Pacific region.

We will also work to revitalise global trade negotiations in the World Trade Organisation with a new agenda focused on achievable outcomes. Finalising the Environmental Goods Agreement and Trade in Services Agreement by the end of 2016 would be a good start. Completing Australia’s accession to the WTO Government Procurement Agreement will lock-in access to major government procurement markets.

I look forward to continuing to work with Australian businesses to help them reach their full potential, at home and overseas.

I wish you success on your business travels, exploring and capitalising on new trade and investment opportunities.

USA: Global economic superpowerThe US economy has recorded 26 quarters of uninterrupted growth, creating unprecedented opportunities for dynamic Australian businesses.The Hon Joe Hockey, Australian Ambassador to the USA

Approaching eight consecutive years of uninterrupted economic growth, the US economy continues to expand despite significant global headwinds. It is predicted to outpace its developed economy peers in 2016 and again in 2017, including the UK, Germany and Singapore.

Already our largest investment partner, the US recently overtook Japan to become Australia’s second largest trading partner. The US economy is witnessing solid growth across industries where Australian businesses are highly competitive. From energy to agriculture to digital technology, there is unprecedented opportunity for dynamic Australian businesses.

In energy, spurred by innovation in hydraulic fracturing technologies, the US has added the equivalent of over 4.2 million barrels of oil per day to the global market over the past five years. Despite falling energy prices, output has continued to grow, making the US the world’s largest oil and gas producer. The renewable energy sector continues to thrive. In 2014, the US installed as much solar power capacity every three weeks as it did in all of 2008. As the Obama Administration pursues a 32 per cent reduction in carbon dioxide levels by 2030, opportunities in the sector will continue to flow.

Despite slowing agricultural exports, US agricultural imports are expected to grow, driven by changing consumer preferences. In 2014 alone Australia’s beef exports to the US increased 87 per cent due to increasing demand for grass-fed beef and a harsh Californian drought. While beef exports have slowed in recent months, US consumer demand for high quality agricultural produce (including high quality meat and organic foods) continues to grow sharply, providing more opportunities across the board for Australian farmers.

The digital technology sector in the US is arguably the world’s best and is thriving. Nurtured by an ecosystem of abundant capital, extensive R&D and a risk-taking culture, the US digital technology sector accounts for a greater proportion of GDP than the entire

US retail sector. As the economy digitises rapidly, opportunities will continue to emerge. Already, innovative Australian companies such as Atlassian (a world leader in enterprise software) are taking advantage. Originally from Sydney, the company’s IPO on the NASDAQ in December valued it at close to US$6 billion.

The size, quality and success of February’s Australia-United States Business Week is testament to the strong reputation of Australia in the US and our growing business links. I was particularly impressed by the interest and participation from top-tier US firms, including PepsiCo, GE, Chevron and Johnson & Johnson. Another highlight of Business Week was the opening of the Australian Government Landing Pad in San Francisco. The Landing Pad will help Australian business grow and develop by providing them access to a short-term operational base in the world’s most innovative region – San Francisco and Silicon Valley.

One of my top priorities as Ambassador is advocacy of the Trans-Pacific Partnership, a 12-country trade agreement, representing around 40 per cent of the global economy. As the world economy continues to change, the Agreement will give Australian companies a leg up in the competitive US market. There is nowhere that this will be more important than in access to US-run global value chains. With inputs for goods and services increasingly sourced from multiple countries, many US products are the result of far-reaching global value chains, including the Boeing 787 Dreamliner and the Apple iPhone. The Trans-Pacific Partnership will create unparalleled opportunity for Australian business to Secure positions in US-managed global value chains.

Australia’s increased focus on innovation under the National Innovation and Science Agenda, dovetails well with the extensive innovation taking place at all levels of the US economy. The Agenda is helping to forge pathways for Australian business and researchers to collaborate with their US counterparts, including through events such as G’day USA,

Australia-US Business Week, the San Francisco Landing Pad and linkages with incubators such as Washington DC’s “1776”.

Since my arrival to the US in January, I have been struck by the warmth that Americans at all levels have for Australia. Our country enjoys a reputation in the US which is the envy of many others. The friendship between our two nations runs deep, with Australia the only country to have served with the US in every major conflict over the past 100 years. Our people to people links are strong and expanding, as witnessed by the 15 per cent rise in visitor arrivals to Australia from the US in 2015. Our business links are strengthening, highlighted by the tenth anniversary of the Australia-US Free Trade Agreement last year and our burgeoning trade and investment ties. At a government level, I was delighted to hear directly from President Obama the value which he places in our bilateral relationship when I received my credentials earlier this year. As I travel across the country meeting with businesspeople, governors and members of Congress, I am constantly reminded of the strength and depth of our relationship.

But we cannot take our relationship for granted. Our high performing network of consulates and the Embassy are working hard to further our bi-lateral links every day. The strength of the US-Australia relationship presents Australian business with a unique opportunity to get a foot in the door in one of the world’s most dynamic, innovative and expansive markets. With a favourable exchange rate, a growing economy and low interest rates, there has never been a better time to do business with the US.

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Department of Foreign Affairs and Tradebusiness envoy

Cables from postDispatches from Australia’s global diplomatic network

From Vietnam: Getting Australian wine on the tableAustralian wine exports to Vietnam were valued at $10.6 million last year. While this figure may appear modest, it belies an underlying trend of strong growth: the value of our wine exports has increased four-fold since 2011, and doubled between 2014 and 2015 alone. Like China, strong sales of mid-range Australian red wines are driving much of this growth. Wine is becoming increasingly popular among Vietnam’s expanding urban middle and upper classes. However, at a time when local demand is blossoming, Australia’s market share is falling behind market leaders France and Chile, and faces increasingly stiff competition from other producing nations. Understanding which barriers may be impeding Australian market share was the focus of a recent wine roundtable held in Ho Chi Minh City as part of the inaugural Taste of Australia in Vietnam food and beverage promotion. The discussion drew together Australian wine producers, Vietnamese importers, retailers and distributors and Department of Agriculture and Water Resources and Austrade officials. A key issue identified was a limited local understanding of Australian wine. Price and perceived prestige influenced local purchasing decisions far more than quality, favouring competitors. This was compounded by a perceived lower level of awareness of Australian wine, with ongoing promotional and educational activities being undertaken in-market by other competing wine nations. Another challenge was the local regulatory system, with import licenses, labelling and food safety requirements adding to the complexity and cost of doing business. Accompanying the roundtable were commercial activities to promote Australian wine. These included wine tastings and business matching for the 11 Australian wine brands promoted at Taste of Australia, and sommelier training on Australian wine for Vietnamese wine professionals and distributors. Both activities sought to boost awareness of Australian wine and drive new business connections. Having unpacked the issues around impediments to growing Australian wine’s market share in Vietnam, our posts will work closely with Australian industry and stakeholders on strategies to overcome some of the barriers identified.

From Singapore: Business to benefit from Strategic Partnership Improved mobility for business people, better access to government procurement contracts, and enhanced mutual recognition of professional qualifications are just some of the benefits that will flow to Australian business from a new package of initiatives announced by Australia and Singapore in May. The Comprehensive Strategic Partnership aims to enhance strategic, trade, economic, defence and people to people links with Australia’s largest trade and investment partner in Southeast Asia, including by integrating both economies beyond the existing Singapore-Australia Free Trade Agreement. Trade rules in SAFTA in goods, services and investment will be updated to reflect business needs, reduce red tape and increase bilateral trade. New measures will also provide greater certainty for Australian lawyers and law firms operating in Singapore. Australia has locked in existing opportunities in the legal sector, including the ability to practice Singapore law and to work in international commercial arbitration. Australia will also benefit from future market reforms in Singapore’s legal sector, which will become SAFTA commitments. The announcement of the Partnership has generated an unprecedented level of local media interest and public commentary in Singapore, lifting the profile of the bilateral relationship and highlighting the opportunities.

From New Caledonia: Austmine Mission 2016 Building on the momentum of its inaugural 2015 mission, Austmine, in association with the Australian Consulate-General in Noumea and Austrade, led a delegation of 11 Australian mining equipment, technology and services companies to New Caledonia in March to explore developments and opportunities in the mining sector. Visits to nickel mining and refinery sites and meetings with the key nickel producers offered an insight into the local operating environment and an opportunity to discuss site management, technology, forward planning, and specific service and product offerings with local managers. Coming at a difficult time for the resources sector locally and globally, participating Australian companies took both a longer-term business development and shorter-term solutions-focused approach to potential partnerships. Reducing the costs of production is the single biggest challenge for nickel mining-metallurgical operators in New Caledonia. For participating companies whose expertise lies in reducing costs and new technologies for mine management, the visit was an opportunity to showcase what they can bring to industry in New Caledonia. The visit was also an opportunity to establish and build relationships in preparation for a time when the nickel crisis has passed. For both Australian and local participants, the mission underscored that Australian companies can offer New Caledonian mining industries world-class capability.

Vietnam Photo: Siamak Djamei

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From Warsaw: Poland’s defence modernisation spending offensivePoland, host of July’s NATO Summit, has committed $45 billion over ten years to modernising its armed forces. Motivating factors include growing geopolitical uncertainty in the region and the need to upgrade Poland’s ageing military equipment to meet NATO interoperability standards. The comprehensive procurement program, which covers the army, navy and air force, could provide lucrative opportunities for the Australian defence sector, including in related fields such as aviation, IT and health services. Each September, the Polish town of Kielce hosts MSPO – the largest defence industry expo in Central Europe – at which manufacturers from around the world showcase their newest products. Among the Australian producers present in 2015 were Thales Australia, maker of the Hawkei protected vehicle, which is competing for Poland’s multipurpose vehicle tender. The Australian Embassy and Austrade in Warsaw, with the support of Australian Defence officials in London, will be at MSPO again this year to support Australian businesses seeking to take advantage of the opportunities presented.

From Lima: Promising Peru Blessed by a resource rich environment and an open and stable economic model, Peru has become a promising market for Australian business. The local economy has enjoyed more than 15 years of consistent growth, particularly in the mining, minerals and hydrocarbon sectors. The number of Australian entities operating or investing in Peru has grown steadily over the past decade to nearly 90 in total. Australian investment in Peru is valued at around $5 billion; and Australia is Peru’s fifth largest foreign investor in the mining industry. While Australian commercial interests are mainly focused around mining, important opportunities exist in agriculture, education, tourism and energy. The Australian Embassy in Lima is also encouraging Australian investors to look further afield to sectors such as transport, water, and infrastructure for major sporting events and services, including in the context of the Trans-Pacific Partnership. The Australia brand, our record of economic success and reform, and our expertise in a range of key sectors is highly valued in Peru and holds Australian commercial interests in good stead.

From China: Australia Week in China 2016Australia Week in China 2016, held in April across 12 cities in greater China, was Australia’s largest ever business promotion event consisting of almost 1000 delegates from around 750 companies. AWIC focused on forging business linkages, building the bilateral relationship with our largest trading partners and demonstrating Australia as a trusted trade, investment, education and tourism partner with China. Led by the Minister for Trade and Investment, AWIC comprised over 140 events across eight industry streams, showcasing Australian capability and highlighting opportunities flowing from the China-Australia Free Trade Agreement. At least 27 commercial deals and memoranda of understanding were signed during the week, spanning a wide range of sectors and confirming that Australian businesses are increasingly capitalising on the opportunities arising from China’s growing middle class and demand for products and services. The event, attended by Prime Minister Malcolm Turnbull and other federal, state and territory ministers sent a clear message about Australia’s commitment to strengthening the bilateral economic relationship. Delegate feedback from the event has been overwhelmingly positive, with 96 per cent of those surveyed reporting that participation was advantageous for their business. More than half are expecting to achieve a commercial outcome in the next 12 months, either through commencing or increasing exports to China, or entering into an agreement, strategic alliance or joint venture with a Chinese partner. The event was managed by Austrade with support from DFAT, Tourism Australia and other federal and state government departments.

Austrade will be delivering Australia Week activities in China, ASEAN, India and the America’s over the next two years. To register your interest in joining future Australia Week events, visit http://www.austrade.gov.au/Events/federal-government-led-business-missions

Shanghai Photo: Ken Lawrence

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Cables from postDispatches from Australia’s global diplomatic network

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From Los Angeles: The Big DryAs California enters its sixth year of severe drought, the state continues to look to Australian water management expertise for solutions. A State of Emergency was declared in California in early 2015, with the State Legislature subsequently approving USD7.545 billion in water bonds to assist in the emergency response. This includes measures to improve water storage and recycling, groundwater sustainability and flood management. Over the last year, two delegations of influential Californian legislators and water industry experts have visited Australia to learn from our drought-management experience and meet with leading organisations in emergency management, information and communication technologies, and environmental sustainability. The scale of California’s drought response continues to provide potential trade and investment opportunities for Australian companies with expertise in drought and water management. The Australian Consulate-General in Los Angeles is working closely with California’s key water policy legislators, State Water Resources Control Board, municipal water districts and water experts to showcase Australian best practice and assist in moving California’s drought response forward.

From New Delhi: New bankruptcy law to improve business environmentIndia has replaced its century-old bankruptcy law with a more modern legal code, in an important step towards improving the local business environment. The new code is expected to dramatically speed up the process of winding-up failing companies and recovering monies from defaulters, from the

existing average of 4.3 years to less than one year. The new code should also provide lenders with greater security and help them deal with non-performing loans, which are a serious challenge for the banking system. The Australian High Commission in New Delhi and Consulate-General in Mumbai report that local contacts are cautiously optimistic that the new bankruptcy code will increase ease of doing business and boost confidence in capital markets. Nonetheless, the creation of an entire ecosystem of institutions in support of the new regime, from a regulator to insolvency professionals to information utilities, will take time.

From China: Partial suspension of new cross-border e-commerce arrangementsChina’s Ministry of Finance has announced a twelve-month suspension of new documentation and customs clearance requirements introduced under China’s new cross-border e-commerce (CBEC) arrangements. Effective immediately and until 11 May 2017, goods entering bonded warehouses in ten pilot zones, including Shanghai, Guangzhou and Shenzhen, will not be required to meet the beefed-up requirements announced in April 2016. Instead, goods will be allowed into China through CBEC channels with the same minimal documentation that was required prior to April. This means the new licensing, registration and filing requirements announced in April for cosmetics, baby formula, medical devices and special foods, including health supplements and formulae for medical purposes, have been suspended. Australian manufacturers selling online in China have welcomed news of the grace

Los Angeles Photo: Henning Witzel

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period, which gives them more time to comply with the same product standards that apply to domestic manufacturers and conventional imports. Meanwhile, the new tax arrangements announced by China on 8 April will remain in force. Products on a combined positive list of 1293 goods and sold via approved bonded warehouses will be exempt from import duties, but must pay 70 per cent of the applicable VAT and consumption tax. Separate taxes on merchandise directly shipped from overseas have also been introduced. These rules only apply to merchandise sold directly to online consumers. Commercially exported Australian merchandise is not affected by these changes, and continues to benefit from reduced tariffs under the China-Australia Free Trade Agreement.  While these developments are unlikely to disrupt the pattern of strong growth in China’s e-ecommerce sector throughout 2016-17, the manner in which these changes were announced caught many Australian businesses off guard. The Australian Embassy in Beijing and our network of Australian consulates in China are working closely with Austrade to support and advise Australian business on implementation of China’s CBEC arrangements. Austrade has commenced hosting webinars for exporters to explain how to be prepared for the new regime in 2017.

From Tel Aviv: Landing pad takes offAustralian entrepreneurs are a step closer to bringing their ideas to market, with the official launch in June of the Australian Government’s ‘landing pad’ in Tel Aviv. The landing pad, delivered in partnership with local innovation community SOSA and administered by Austrade, will provide a range of services to Australian startups, entrepreneurs, researchers, corporates, policy makers and innovation service providers.  Services on offer will include tailored business development, facilitated access to more than 275 multinational R&D centres in Israel, and intensive ‘boot camps’ designed to enhance the innovation skill-set of Australian participants. Initial interest in the Tel Aviv landing pad has been strong, with the NSW Government announcing it will sponsor a visit by NSW FinTech companies in coming months. Tel Aviv is one of five landing pads announced under the Government’s National Innovation and Science Agenda, joining San Francisco, Shanghai, Singapore and Berlin. The locations selected are all global innovation hubs, with established innovation and startup ecosystems and accessible networks of entrepreneurial talent, mentors and investors. For more information about the landing pad program, including how to apply, please see the Australia Unlimited website.

From Port Moresby: The sweet taste of opportunity for local cocoa The cocoa industry has significant growth potential for Papua New Guinea’s Autonomous Region of Bougainville, including as a provider of sustainable rural employment, a generator of government revenue, and a contributor to household income and improved livelihoods. As part of Australia’s development assistance in Bougainville, which is approaching $50 million, the Australian High Commission in Port Moresby (the Department of Foreign Affairs and Trade and the Australian Centre for International Agricultural Research) supported the inaugural Bougainville Chocolate Festival from 5 to 6 July 2016. The festival showcased Bougainville to the international chocolate community and created opportunities for export market links. Cocoa buyers from Australia and across the region participated in the event, which also raised farmer awareness about available agriculture extension services and encouraged good cocoa farming and processing practices. Festival activities included a series of business and development project showcases focusing on agriculture and trade links, and culminated in a chocolate competition, in which a panel of international judges appraised chocolate made from local Bougainville cocoa.

From Jakarta: Revised foreign investment limitsThe Indonesian Government has revised its negative investment list, which details sectors of the local economy that are fully or partially closed to foreign investment. The revised list increases foreign investment limits in several sectors, including toll roads, warehousing, job training, telecommunication network services and data communication services. Limits were also increased for investment in e-commerce and downstream fish processing albeit with conditions requiring partnership with local small or medium-sized enterprises. Of interest to the Australian food and beverage industry will be the decision to permit 100 per cent foreign investment in restaurants and catering services, although minimum investment limits still apply. The increase in foreign investment limits for warehouses and cold storage is also welcome and may help to improve the distribution of food and agricultural commodities across Indonesia. Some sectors were granted higher investment limits – such as some construction businesses – but the minimum value above which investments must take place was also significantly increased. Other sectors of interest to Australian investors – including banking, insurance, formal education, healthcare, and onshore and offshore oil and gas drilling – remain unchanged. Investors need to stay alert to the complexities of investing in Indonesia and consult the list and other experts prior to investing. The next revision to Indonesia’s negative investment list is expected in 2018.

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Sustained growth in the world’s most innovative economyThe United States is the world’s largest economy accounting for over a fifth of global GDP, is home to more than 320 million people and is the global hotspot for innovation.By DFAT and Austrade officers at US posts

While the global financial crisis hit economies around the world hard, the US economy has bounced back better than most, recording over 26 quarters of uninterrupted economic-growth. Interest rates remain at near-record lows, wage growth is at its highest since 2009 and investor confidence continues to climb.

Already a world leader, the US economy is rapidly becoming ever more sophisticated. Since 1980 the advanced industries sector has grown at over 5.4 per cent per annum, outpacing overall GDP growth and adding over 4.4 million jobs in tech hot-spots from Boston to Austin to San Francisco. The services sector continues to grow and now accounts for over 80 per cent of the economy, with opportunities for innovative Australian service providers across the sector, including financial services, healthcare and tourism.

The size, strength and sophistication of the US market have helped to fuel its thriving innovation sector, which by many measures is world-leading. Total US R&D spend of $433 billion accounts for almost half of the OECD total of $1.07 trillion. Its venture capital market is huge, with over seven times more capital available per person compared with Australia. The US is home to just under half of the world’s internet-based firms, it hosts 63 of the world’s top 200 universities and has the greatest concentration of Fortune 500 companies of any country on earth.

Seizing the OpportunityAustralian companies are uniquely positioned to do business in this lucrative market. Australia is one of just 20 countries to have a free trade agreement with the US, providing

duty free access to 97 per cent of all Australian exports. Under the E3 Visa, Australian professionals and their spouses can live and work in the US indefinitely if sponsored by a US business, a privilege accorded to no other country. And with the Trans-Pacific Partnership Agreement, the prospects for Australian business in the US are set to improve even further.

Many businesses are already seizing the opportunity. Australian exports to the United States grew 20 per cent last financial year. In contrast, Australia’s exports into China, Japan and Korea combined fell 13 per cent. And it’s not just large corporations which are taking advantage. There are more small and medium enterprises exporting from Australia to the United States than any other country except New Zealand. But our deep economic links do not end with trade. The US is the major source of investment in Australia, accounting for over a quarter of all foreign investment. Similarly Australia invests more in the US than in the next four countries combined.

The National Innovation and Science AgendaThe Government’s National Innovation and Science Agenda is helping to forge new opportunities for pioneering Australian businesses, attracting attention from leading companies in the US.

Prime Minister Turnbull’s visit in January highlighted to US audiences the Government’s new commitments under the Agenda, including the $8 million Incubator Support Program and a $26 million program to support the development of silicon quantum computing technology. During his visit, the Prime Minister met

with a number of Australian companies, including QxBranch, an advanced data analytics firm doing business in the US. His visit reinforced to the local industry the creativity and dynamism of Australian business.

The Government continues to support Australian companies who are willing to take risks to grow their business in the expansive US market. Events such as the G’day USA Emerging Innovators Xchange in Los Angeles in April and the Washington Embassy’s Australian Defence Science and Technology Conference in May are helping to build linkages between innovative Australian firms and their US counterparts. With more events planned for the remainder of 2016 and beyond, the Government is prioritising assistance for Australian companies to get their foot in the door of the US market.

Expanding Australia’s Presence in the USTo build on the work of the NISA and capitalise on the strength of the US economy, the Australian Government is enhancing Australia’s presence in the US with new offices and events. As Australia’s leading investment market by a large margin and the world’s premier destination for businesses to develop globally, accelerate and incubate, the US was an obvious choice for an event to refresh our strong commercial relationship. In February this year, Australia-United States Business Week reflected the most intensive business-to-business engagement Australia has mounted in the US. It included over 80 events across six cities with more than 230 Australian business delegates travelling to the US to participate. Austrade arranged programs focused on areas where new opportunities are emerging such as medical,

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agricultural and resources technology, big data analytics and cybersecurity and tourism.

Business Week events attracted US executives keen to discuss new business, investment and collaboration. More than 350 guests attended the AUSBW Business Dinner, where GE’s Vice Chair of Business Innovations, Beth Comstock, provided valuable insights into GE’s forward strategy. Partnership strategies for Global Value Chains were discussed with US corporate giants such as, Hewlett-Packard, Mars and Medtronic.

Australia-US Business Week included events in Houston and Boston, where Austrade has recently opened new offices. Houston is the fourth largest city in the US and a global centre of resources and energy, while Boston is an epicentre for life sciences innovation and technology-rich industries.

Austrade’s increased presence throughout the US is helping to identify opportunities for Australian business to grow and thrive in the world’s largest and most innovative economy.

Australian Innovation in the USAs the trade and investment links between the US and Australia expand, a number of innovative Australian companies are thriving in the US market. The success of these companies is driven by the burgeoning US economy, a unique risk taking culture as well as access to bountiful capital and world-leading R&D.

Melbourne-based agribusiness company Nufarm has been operating in the US since 1998. The company’s North American headquarters is located in Chicago, the heart of the mid-west region, which supplies over 45 per cent of total US agricultural produce. Nufarm’s US operations specialise in crop protection products and have helped it to become the world’s eighth-largest crop protection company. The company’s success in the US is underpinned by its extensive research and development facility in Research Triangle Park, North Carolina, situated among some of the world’s most innovative corporations.

Another Melbourne-based company, Blue Dot Innovation has recently expanded its footprint to San Francisco. The company provides state-of-the-art location services technology for mobile. Co-Founder Emil Davityan made the move to California to be closer to venture capital, for proximity to major customers and for potential opportunities for acquisition. However, it hasn’t all been smooth sailing. Bluedot has faced cost pressures, including from the price of labour in San Francisco and Silicon Valley, which can be significantly more expensive than Australia, and a fluctuating exchange rate. Overall, the advantages of having a location in the global heart of the technology boom have far outweighed the costs, with Bluedot’s month on month growth averaging 100% since it arrived in the US.

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The Australian Government has a network of Department of Foreign Affairs and Trade and Austrade offices across the United States.

DFAT and Austrade work closely together to advance Australia’s interests in the US, particularly in creating conditions for increased trade and investment to strengthen our economy and create jobs.

DFAT officers deliver Australia’s economic diplomacy agenda, implement foreign and trade policy, negotiate international agreements and provide consular assistance.

Austrade is responsible for attracting foreign direct investment into Australia, promoting Australia as a place to research and study, and supporting Australian companies looking to export or participate in global value chains.

Australia in the United States

Honolulu Australian Consulate-GeneralHawaii is the home of US Pacific Command (USPACOM), the headquarters responsible for US military activities in over 50 percent of the earth’s surface including North Asia, Southeast Asia and the Pacific and Indian Oceans. The Consulate-General engages with USPACOM on defence and security issues in the Indo-Pacific region. Like other US offices, the Consulate-General is also advocating for US ratification of the Trans-Pacific Partnership, as part of its economic and diplomatic functions.

Jeff RobinsonConsul-General

Los Angeles Australian Consulate-GeneralAustralia’s capabilities in Los Angeles span across a range of sectors, including the creative industries (film, music and fashion), innovation and technology, infrastructure, education, and tourism. The Consulate-General raises awareness of these capabilities and also manages the annual G’Day USA program. This program brings together business, academia and policy makers to showcase Australia as an innovative and high-quality partner for the US, build people to people links, and enhance dialogue on shared priorities such as cooperation in the Asia Pacific, defence industries, water and drought management, and innovation.

Chelsey MartinConsul-General

San Francisco Australian Consulate-GeneralThe San Francisco Bay Area is at the centre of global technology and innovation. The Consulate-General focuses on investment attraction in key areas including digitech, cyber security, agritech and clean energy. Australian startups and entrepreneurs looking to access the Bay Area ecosystem can apply to participate in the Austrade-managed Landing Pad.

Chris OldfieldTrade and Investment Commissioner, Consul-General Chris.Oldfield@austrade.gov.au

Frances van RuthTrade and Investment Commissioner, Consul Frances.vanRuth@austrade.gov.au

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Indiana

Illinois Iowa

Kansas Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan Minnesota

Mississippi

Missouri

Montana

Nebraska Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

SouthCarolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

WestVirginia

Wisconsin

Washington DC

Boston Massachusetts and the city of Boston are known for technology rich industries and Science, Technology and Engineering and Maths (STEM) focused educational institutions. It also has a growing reputation as a centre for venture capital. Austrade’s Trade and Investment Commissioner in New York is responsible for the operations of Austrade’s Boston office. The Boston team is working on building trade, investment and research links primarily in the medical technology sector.

Houston Australian Consulate-GeneralTexas is recognised as a global hub for energy, with the city of Houston also a centre for medical research and international business. The Consulate-General is primarily focused on attracting productive foreign direct investment to Australia, with a particular emphasis on resources and energy, medtech, biotech, defence, cyber security, agribusiness and food. Promoting Australia’s education and research links and seeking out major opportunities for Australian companies in these sectors is also a priority.

Washington DC Embassy of AustraliaThe Australian Embassy is working to further Australia’s strong bilateral trade and economic relationship in the heart of US and global policy, Washington DC. A key priority for the Embassy is the promotion of the Trans-Pacific Partnership. The Embassy is also actively promoting Australia’s innovation credentials, growing US investment into Australia and building the people to people links to underpin economic success, including in education, research and tourism.

The Hon Joe HockeyAmbassador to the United States

John AngleySenior Trade and Investment Commissioner John.Angley@austrade.gov.au

Chicago Australian Consulate-GeneralChicago and the Midwest region of the United States is a dominant global centre of agribusiness as well as food technology and processing. It is the powerhouse of US manufacturing and the primary global hub for financial derivatives. The Consulate-General in Chicago supports and promotes two-way engagement across all these sectors, particularly where innovative advances are mutually beneficial, and facilitates US investment into Australia.

Michael WoodConsul-General

Chris KneplerInvestment Commissioner Chris.Knepler@austrade.gov.au

Alastair WaltonSenior Trade and Investment Commissioner, Consul-General Alastair.Walton@austrade.gov.au

Patrick HanlonTrade and Investment Commissioner, Consul Patrick.Hanlon@austrade.gov.au

** Note HE Ms Gillian Bird, Ambassador and Permanent Representative to the United Nations, is based at the Australian Mission to the United Nations in New York. The Mission represents Australia at the United Nations in New York, including meetings of the General Assembly. It also participates in the ongoing work of the UN’s other bodies, such as the Security Council and the Economic and Social Council, and follows the activities of the UN’s funds, programs and specialised agencies.

New York Australian Consulate-GeneralAustralians are increasingly represented across a range of sectors in New York. In addition to finance, science and technology, Australia has a rapidly growing presence in fashion, tourism, hospitality and food production. The Consulate-General seeks to raise US awareness of these strengths. It works with Austrade’s New York office to attract investment into Australia. Priority sectors for Austrade in New York include medtech, digitech, agribusiness, resources and financial services.

The Hon Nick MinchinConsul-General

Nicola WatkinsonSenior Trade and Investment Commissioner, USA and Canada Nicola.Watkinson@austrade.gov.au

Gareth SimpsonTrade and Investment Commissioner Gareth.Simpson@austrade.gov.au

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Department of Foreign Affairs and Trade

G’DAY USA Emerging Innovators XchangeG’Day USA, the Australian Government’s largest public and economic diplomacy program in the United States, held its inaugural Emerging Innovators Xchange in Los Angeles.

The full-day April Xchange included Tedx-style talks, an innovation leadership panel, two live segments of the YouTube series ‘The Tomorrow Show’, a science and tech showcase and an awards ceremony recognising significant Australian breakthroughs in innovation.

Former White House Deputy Chief Technology Officer for Government Innovation, Chris Vein, also delivered a keynote talk exploring the innovation landscape in Australia. The G’Day USA Xchange was the latest in a series of events delivered in LA aimed at identifying and establishing strategic partnerships to promote the Australian National Innovation and Science Agenda.

LA is a major US centre for innovation and technology, ranking as the third best city in

Recipients of the G’Day USA Innovation Awards: (Left) Professor Daniel Shaddock, (Right) Tom Wood, CEO and Co-Founder, Nexus eWater

the world for startups behind Silicon Valley and Tel Aviv. With its access to top university R&D pipelines, creative workforce, well-developed industry clusters and access to capital, LA is increasingly becoming a major destination of choice for tech start-ups and early-stage entrepreneurs.

Presented by Northrop Grumman and produced in partnership with the Australian National University, AECOM, and the New South Wales and Victorian State Governments, the Innovation Xchange is set to become an annual fixture on the G’Day USA calendar.

G’Day USA was first launched in 2004 and has since grown to become one of the largest programs of its kind run in the United States. The unique

For further information about G’Day USA, including a complete list of partners, sponsors, participants and events, visit gdayusa.org

program is largely funded through sponsorship and delivered in partnership with the corporate, academic and not for profit sectors. Other key recent policy events held as part of the program include the US-Australia Defence Industries Dialogue, the US-Australia Dialogue on Drought and Water Management and the annual Dialogue on Cooperation in the Asia-Pacific.

business envoyDepartment of Foreign Affairs and Trade

Saving water, one litre at a timeA start-up co-founded by two Australian National University engineering graduates in their own backyards took home the G’Day USA Emerging Innovator Award for their grey water treatment system.

ANU graduates Andrew Hermann and Tom Wood collaborated with grey water veteran Craig Richmond and US-based water entrepreneur Ralph Petroff to found Nexus eWater. In 2015 they launched their innovative water system in the drought-prone US west coast.

“This is an exciting time to be in the water industry,” says Tom Wood, CEO of Nexus eWater. “With California in its fifth year of drought and water ordinances and prices on the rise there is significant opportunity to make on-site water recycling the norm for new homes in California.”

Nexus eWater’s grey water treatment appliance, the NEXtreater, can treat up to 200 gallons (about 757 litres) of grey water a day with

More information can be found online at nexusewater.com

minimal homeowner attention or maintenance. Grey water, which is the soapy water from showers, laundry, and hand sinks, makes up approximately two-thirds of a home’s indoor water use. The NEXtreater uses no chemicals or biologics and is the first system of its kind to meet all requirements of the California State Plumbing Code for reuse for outdoor irrigation and even indoors for toilet flushing.

The technology, which has been featured in National Geographic, The New York Times, Wall Street Journal, and CNBC, has an average install price of $10,000–$15,000 per home. Nexus eWater was recently acknowledged at the White House Water Summit for its partnership with River Islands, a planned community located in the San Francisco Bay Area.

Professor Daniel ShaddockThe G’Day USA Award for Innovation was presented to Daniel Shaddock, Professor of Quantum Physics at the Australian National University and Former Director’s Fellow at NASA’s Jet Propulsion Laboratory.

Professor Shaddock has had a long career in innovation. Before joining the Australian National University as a Professor in Physics, he was a Director’s Fellow at NASA’s Jet Propulsion Laboratory where he worked on the Laser Interferometer Space Antenna mission.

He led Australia’s involvement in the GRACE Follow-on mission to map the Earth’s gravity and was part of the team that detected gravitational waves with the Advanced LIGO project.

Professor Shaddock is also the founder and CEO of the start-up Liquid Instruments which makes high-end test and measurement instruments.

“A NEXtreater installed in every household in America would save enough water to fill Lake Mead (Hoover Dam) – from empty to overflowing, every year. Obviously we won’t get there quickly, but it gives you an idea of the scale of what’s possible without changing anything about the way we live in California.” Tom Wood, CEO and Co-Founder Nexus eWater

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For more information and to apply please visit: australiaunlimited.com/landing-pads or contact Austrade on 13 28 78 or email landingpads@austrade.gov.au

Aussie entrepreneurs touch down at our Landing Pad in San Francisco The first group of Australian startups have begun their residency at the Australian Landing Pad in San Francisco.

Chicago: a trading powerhouseChicago remains the dominant global force in financial derivatives – principally futures and options.By Consul-General Michael Wood, Chicago

Mr Killion, “the talent pool is deep in Chicago and the cost of living is reasonable, making it a great city to conduct business”.

Mr Killion said Akuna had achieved such rapid expansion through big investment in technological innovation with most staff involved in the technology and quantitative teams. Akuna also partners with cutting-edge US-based technology vendors including Arista, Cisco, Juniper, Intel, Dell, HP, Solace, and Palo Alto.

Another key strategy is to develop deep relationships with the major US exchanges – CME, CBOE, ISE, BATS, NASDAQ, NYSE – and other members of the financial markets industry including brokers, regulators, vendors, clearers, banks, and other related professionals.

Within commodity options which are mostly traded on CME, Akuna is a top 3 firm by volume, including in some commodities which are important to the Australian economy. Within S&P options, the largest listed option complex in the world and the world’s benchmark equity index and hedging and investment instrument, Akuna is a top 10 firm by volume.

The diverse group of innovative technology businesses range from an app for child safe Wi-Fi to a personnel management solution for large volunteer-led events.

While at the Landing Pad, Aussie entrepreneurs have access to nearby investors and customers in Silicon Valley, widely regarded as the epicentre of global technology innovation.

Landing Pad Manager Margaret Donoghue, together with delivery partner RocketSpace, are working closely with the Australian startups to take their companies to the next level. RocketSpace provides state-of-the-art workspace facilities and a curated ecosystem specifically designed to help tech startups to thrive. Notable alumni of RocketSpace include technology leaders Spotify and Uber.

Austrade will tap into its established business and investor networks in San Francisco and across the United States to help startups develop their business into high growth and high return enterprises.

business envoy Department of Foreign Affairs and Trade

Consul General and Senior Trade Commissioner Chris Oldfield said the strength of the thriving Australian entrepreneurial ecosystem in San Francisco and Silicon Valley will play a vital role in the success of the startups during and after their time at RocketSpace.

“Landing Pad participants will work closely with their Australian peers engaging them as mentors, and strengthening their existing networks.”

Applications are now open for the second San Francisco cohort and for Austrade’s Landing Pads in Berlin, Shanghai, Singapore and Tel Aviv.

To stay up to date with the latest news about the Australian Landing Pads program follow us on Twitter @LandingPadsAU and Facebook facebook.com/AustralianLandingPads/

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Chicago’s financial markets were built upon the city’s history as an agricultural commodities trading powerhouse. Nowadays, the CME Group, formerly the Chicago Mercantile Exchange and the Chicago Board of Trade, is at the centre of industry.

Australian businessman Andrew Killion co-founded Akuna Capital in 2011. It is an electronic and exchange-based derivatives market-making firm based in Chicago and prevalent on major US option exchanges including CME and CBOE.

In just five years, Akuna has grown from a small start-up with five employees to a top ten proprietary options trading firm in the highly competitive US marketplace. Today, Akuna employs more than 150 people worldwide, but predominantly based in Chicago. According to

business envoyDepartment of Foreign Affairs and Trade

Austrade developed the AUSBW cyber security program, and consulted with Data 61’s Adrian Turner, CEO of Australia’s largest data innovation group; Robert Rodriguez, Chairman and Founder of US-based Security Innovation Network (SINET), whose mission is to advance innovation by connecting global investors, entrepreneurs and buyers; and the department of the Prime Minister and Cabinet’s Cyber Policy team, to identify and engage key players in the US market.

More than 40 Australian delegates took part in the program held in Silicon Valley. At Stanford University, cybersecurity experts led a discussion outlining evolving threats and future strategies, and leading US ‘big data’ company Palantir delivered a keynote address. The program also included a visit to US cybersecurity company Palo Alto Networks, where the Cyber Threat Alliance, a group of leading cybersecurity companies which share threat information in order to improve defences, held a panel discussion. Companies in the Cyber Threat Alliance include Intel Security, Fortinet, Symantec and Palo Alto Networks.

AUSBW provided an opportunity to connect some large multinational businesses with small Australian start-ups and specialist businesses. It also enabled connection with venture capital firms. Lynwen Connick, who was responsible for cyber security policy at PM&C and development of the new national Cyber Security Strategy, also joined the AUSBW digitech delegation, and led the delegation for some key meetings on cyber security. AUSBW took place in advance of the launch by the PM in April of the new Cyber Security Strategy.

Feedback from Australian delegates reinforced the benefit of continuing engagement to enhance cyber security-related bilateral trade and investment, and strengthening engagement on scientific research, innovation and commercialisation. There are strong indicators that there is US interest in strengthening commercial and capability links with Australia in this area.

Nuix is an Australian company already established and growing their presence in the US. CEO Eddie Sheehy said AUSBW gave the delegation great insight into the importance cyber security is gaining in business priorities in Silicon Valley, both in terms of investment and private sector capability development.

Cyber Security at Australia US Business Weekby Michaela Browning, General Manager, Established Markets and Special Adviser to the CEO on Strategy and China Policy, Austrade

AUSBW’s digitech stream included a cyber security program highlighting Australia’s interest in developing cyber security capability, including collaboration between government and industry. It also helped identify further opportunities for Australian companies in the US market.

Eddie Sheehy CEO of Nuix

Vikram Sharma CEO of QuintessenceLabs

“AUSBW showed Australia in a great light and started to move the image of Australia in the technology capital of the world, to being a much more tech savvy, and good place to do business, than perhaps stakeholders had realised,” Mr Sheehy said.

Founder and CEO of Australian data security specialist QuintessenceLabs, Vikram Sharma, said a strong cybersecurity posture was dependent on a cohesive multi-layered defence.

“An unparalleled opportunity exists for Australia to be globally recognised for excellence in critical elements of robust cybersecurity architecture. Our strong research, and corporate and federal capabilities in the sector position us well to leverage this opportunity to create high quality jobs in Australia and generate significant export earnings. In particular, we have strengths in cybersecurity analytics and the generation and management of the highest quality encryption keys.

At QuintessenceLabs we are seeing our leadership in key generation and management increasingly being recognised through deployments at a number of Fortune 500 companies, and in the Federal and Defence sectors. AUSBW offered a valuable opportunity to expand our network within the all-important US cybersecurity market.”

The new national Australian Cyber Security Strategy is building on this lead, by helping Australian cyber security businesses to grow and prosper, and by driving investment. The landing pad opened in San Francisco at RocketSpace during AUSBW will also assist Australian companies establish their businesses in the US market.

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Department of Foreign Affairs and Trade

Medtech – A US market on the move With a market size of around US$150 billion and more than 40 per cent of global market share, the United States is the world’s leading medtech market. And it’s a market that continues to grow at an unprecedented rate: analysts predict global revenues will increase by more than 4 per cent per annum to 2019, to almost half a trillion dollars.

So what factors are shaping the US medtech market and what are the commercial implications for Australian companies? The medtech stream of the 2016 Australia United States Business Week program travelled to three key US markets – Boston, San Francisco and Houston – to find out.

Medtech refers to diagnostic or therapeutic application of science and technology to improve the management of health conditions, including increasing life spans and improving quality of life.

The United States is already a strong performer in medtech sectors such as In Vitro Diagnostics, Neurology, Cardiology, Orthopaedics, and Diagnostic Imaging, all of which attract investors looking to capitalise on innovation. Newly emerging medtech sectors are also catching the eye of savvy investors. These include opportunities created through the convergence of medtech with the digital world, such as mobile health, wearable biosensors, health data analytics, robotics, 3D printing, tissue regeneration, and artificial intelligence. Another emerging area is companion diagnostics, which include medical devices that provide information for the safe and effective use of a corresponding drug or biological product.

Some of the market forces shaping the US sector include ongoing consolidation in the hospital and care sectors, and an increased focus on efficiencies, value for money and outcomes-based results. Merger and acquisition activity is at record highs in the sector, but early stage and venture investing has been declining. In 2015, medtech comprised just four per cent – or USD2.4 billion – of the total venture capital invested. However, analysts also note that big corporates are looking earlier down the biopharma/medtech pipeline at companies who are yet to secure regulatory approval.

On the policy front, the United States has suspended the 2.3 per cent medical device excise tax for two years. This move has been seen as a major win for the medtech sector and is expected to assist in promoting new R&D and partnership investment.

So what opportunities does the US medtech sector present for Australian companies? This was one of the key questions framing the medtech stream of the 2016 Australia United States Business Week program, which targeted three of the key US medtech markets: Boston, Houston, and San Francisco.

In Houston, Australian delegates took part in a medical research symposium at the Texas Medical Center Innovation Institute (TMCx), looking at the challenges and opportunities in the medtech industry from conception to commercialisation.

Houston is considered the birthplace of nanotechnology and has developed into a life sciences hub. Much of this is driven by the Texas Medical Center, which is the world’s largest medical centre. The Center hosts over 8 million patient visits and performs more than 180,000 surgeries each year. Its 21 hospitals offer more than 9,200 total patient beds.

The aim of TMCx is to push the Texas Medical Center to be more than a global leader in research. It seeks to lead the development of technology and ultimately the successful commercialisation of life sciences products. TMCx is designed to use the advantages of a major medical centre to facilitate the development of medical companies, with a focus on digital health and medical device companies.

Since the 2016 Australia United States Business Week program in February, TMC leadership has visited Australia to explore potential research, innovation and commercialisation partnerships. Mr William McKeon, driver of TMCx, sees broad opportunities to create a ‘bio-bridge’ between TMC and Australia to link TMC and various Australian entities in the health innovation and med-tech spaces.

In San Francisco, the medtech delegation attended a networking dinner, a medtech venture capital investment session, and a tour and discussion with a major global medtech company in Silicon Valley around global value chains and partnership strategies.

In Boston, delegates engaged with research organisations, investors and major multinational companies on best practice approaches for medical technology financing and commercialisation, as well as exploring global medtech value chain opportunities.

Key speakers explained how local factors had contributed to establishing Boston and the state of Massachusetts as one of the great medtech and life science R&D hubs in the world. One such factor was a local talent pool driven by first class educational and research institutions such as Harvard and MIT,

which supported technology commercialisation and encouraged their staff to patent, undertake sabbaticals and take new positions in spinout companies. Major medtech corporates and supply chain partners – such as Thermo Fisher, Biogen Idec, Boston Scientific and General Electric – had also chosen to headquarter or build large facilities in the area, creating a medtech cluster. Complementing this was the availability of capital, from early stage to venture to expansion, and proximity of that capital to companies, including the second largest venture capital industry in the US behind Silicon Valley. Supportive government initiatives – including medical infrastructure and public transport for ease of access, incubator facilities and National Institute for Health funding – rounded out the picture.

In recognition of the importance of Boston as an innovation hub, Austrade recently opened a satellite office in Boston inside the WeWork South Station facility to maximise engagement with the technology, medtech, and life sciences community. MassChallenge, one of the largest accelerators in the world based in Boston, also recently announced a partnership with the Australian Government and Microsoft to bring their Bridge program to Australia.

Feedback from participants in the medtech stream of the 2016 Australia United States Business Week program has been positive. According to Dr Bronwyn Evans, Chair of MTPConnect, the Australian Growth Centre for Medical Technologies and Pharmaceuticals, the program highlighted a number of key opportunities for Australia, including the venture capital funding environment in the USA and the importance of new Australian initiatives such as the Biomedical Translation Fund.

Mr George Sidis of IDE Group noted that being part of the medtech stream was a tremendous opportunity for the Group at a time they are investing more resources in growing a presence there. “It was great to see different markets within the US and how they operate, some of which have striking similarities to Australia, and it was great to be given the opportunity to network with likeminded companies, and leading government and industry figures on the trip. I found the introduction to Australian expats in markets we are trying to enter particularly useful,” he said.

The US market continues to be one to watch for Australian medtech companies. In October this year an Australian delegation will visit AdvaMed 2016 –

Companies interested in learning more about the opportunities in the US medical technology market can contact:Austrade’s Trade Manager for International Health, Shelley Jackson at shelley.jackson@austrade.gov.au

Austrade’s Industry Capability Report on Medical Devices and Diagnostics is available at:austrade.gov.au/International/Buy/Australian-industry-capabilities/Health-and-Wellbeing.

the largest medtech industry event in the USA. The Victorian, South Australian, NSW State Governments, together with MTP Connect are supporting companies to be part of the Australian pavilion at AdvaMed in Minneapolis from October 17–19.

CEO of BioMelbourne Dr Krystal Evans has led a delegation to AdvaMed for the last three years. “There is growing interest from the US in investing in Australian innovation and accessing our world leading capabilities in medical technology. Participation in the AdvaMed conference and associated trade mission activities over the last few years has seen Victorian companies secure over $42 million in new trade and investment opportunities. This high calibre executive conference gives Australian companies access to US industry leaders to create new licensing deals, collaborations, contracts and partnerships, providing opportunities to explore Australia’s competitive advantage in the global value chain for medical technologies.”

Australia has a growing reputation for world-class excellence in medical technology. Australia excels in areas such as medical bionics, including global success with the bionic ear, and now with the development of the bionic eye and the bionic spine. Other areas of competitive advantage include strengths in neuroscience, point-of-care diagnostics, 3D printing for surgical implants and cardiovascular devices. There is growing international interest in Australia’s world leading R&D services, with increased numbers of US clients accessing Australia’s highly competitive clinical trial, engineering and design capabilities for medical technologies.

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business envoyDepartment of Foreign Affairs and Trade

On the policy front, the United States has suspended the 2.3 per cent medical device excise tax for two years. This move has been seen as a major win for the medtech sector and is expected to assist in promoting new R&D and partnership investment.

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Department of Foreign Affairs and Trade

Investment benefits under the TPPThe Trans-Pacific Partnership’s investment provisions will facilitate foreign investment into Australia and provide important protections to Australian businesses investing abroad.

The TPP will promote increased and diversified foreign investment into Australia. It will liberalise screening thresholds at which private foreign investments in non-sensitive sectors are considered by the Foreign Investment Review Board.

Thresholds in non-sensetive sectors will be increased from $252 million to $1,094 million for Brunei, Canada, Malaysia, Mexico, Peru, Singapore, and Vietnam. The higher threshold is already in place for the US, Japan, Chile and New Zealand pursuant to our existing FTA commitments and is also reflected in the TPP. Under the TPP, Australia retains the ability to screen investments in sensitive sectors to ensure they are not contrary to the national interest, and lower screening thresholds will apply to investments in agricultural land and agribusiness.

Australia’s investment relationship with the 11 countries that have signed the TPP has grown significantly over the last decade and this relationship makes a vital contribution to Australia.

The TPP will also promote Australian outward investment. It will open up new opportunities in other TPP countries in sectors such as mining and resources, telecommunications and financial services. For example, Canada will allow Australian investors to apply for an exemption from the 49 per cent foreign equity limit on foreign ownership of uranium mines, without first seeking a Canadian partner. 

Australian investors will also benefit from improved preferential investment screening thresholds in other TPP countries. Australian investments into Mexico below

TPP negotiations between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam successfully concluded in October last year.

Ministers from these 12 countries signed the TPP on February 4 in New Zealand. Since then, each of the signatory countries have been undertaking their own domestic treaty-making processes toward implementation and ratification of the TPP.

Detailed information on the TPP can be found at :dfat.gov.au/trade/agreements/tpp/

US$1 billion will not be screened. Australian investors will also benefit from commitments offered by Japan, Vietnam and Brunei Darussalam, when privatising government assets in most sectors, to only impose conditions on foreign investment on their initial sale.

The TPP investment provisions contain rules that will provide additional protection to Australian investors operating in TPP countries. These protections include:

• that Australian investors and investments may not be treated less favourably, in like circumstances, than other investors with respect to the establishment, acquisition, operation and sale of investments in TPP countries

• that investments in TPP countries may not be expropriated or nationalised in the absence of prompt, adequate, and effective compensation

• that investments in TPP countries must be treated in accordance with an internationally accepted minimum standard of treatment, which includes obligations of fair and equitable treatment and protection and security of investments

• investor-state dispute settlement provisions that promote investor confidence in TPP countries, while retaining the Australian Government’s ability to regulate in the public interest and pursue legitimate public welfare objectives in areas such as health, safety and the environment.

Snapshot of Australia’s investment relationship with other TPP countries:

Australian investment in TPP countriesMore than doubled in the last decade to reach

$914 billion in 2015

a rise of

7 %over the previous year

Comprises

44 % of all outward Australian investment

Investment from TPP countries in AustraliaMore than doubled in the last decade to reach around

$1.26 trillion in 2015

a rise of

10 % over the previous year

comprises around

42% of total stock of foreign investment in Australia

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Trade and investment statistics

TOP EXPORT & IMPORT COUNTRIES/REGIONS $ billion 2015

% Growth (YoY)

ExportsChina $ 91.3 vv 7.0Japan $ 42.4 vv 15.7United States $ 22.1 vu 19.3Republic of Korea $ 20.0 vv 9.0India $ 13.6 vu 20.6ASEAN(a) $ 38.6 vv 3.9EU28(a) $ 23.5 vu 5.7ImportsChina $ 64.2 vu 18.3United States $ 48.1 vu 14.3Japan $ 22.7 vu 14.4Republic of Korea $ 15.8 vu 23.6Thailand $ 15.4 vu 20.0ASEAN(a) $ 57.4 vv 5.6EU28(a) $ 65.9 vu 4.2

AUSTRALIA’S TRADE BY BROAD SECTOR$ billion 2015

% Growth (YoY)

Exports (total) $ 316.6 vv 3.2Rural $ 45.1 vu 11.2Resources $ 133.4 vv 15.2Manufactures $ 44.5 vu 4.0Other goods $ 12.1 vu 0.5Gold $ 15.4 vu 8.6Services $ 66.2 vu 10.0Imports (total) $ 352.7 vu 4.7Two-way trade $ 669.3 vu 0.8Balance of Trade $ -36.2 vv 268.4TOP EXPORTS & IMPORTS

$ billion 2015

% Growth (YoY)

ExportsIron ore and concentrates $ 49.1 vv 25.7Coal $ 37.0 vv 2.5Education services $ 18.8 vu 10.4Natural gas $ 16.5 vv 7.3Personal travel (ex education) $ 15.9 vu 12.4ImportsPersonal travel (ex education) $ 26.7 vu 8.2Passenger motor vehicles $ 20.4 vu 15.9Refined petroleum $ 18.4 vv 0.8Telecom equipment & parts $ 11.7 vu 18.6Freight Services $ 10.2 vu 4.9

AUSTRALIA’S INTERNATIONAL INVESTMENT POSITION $ billion as at 2014

% Growth (YoY)

Foreign Direct investment in Australia: 2015United States $ 173.5 vu 6.2Japan $ 85.9 vu 20.6United Kingdom $ 76.0 vv 0.3Netherlands $ 44.4 vu 13.7China $ 35.2 vu 10.4ASEAN $ 41.5 vv 1.4EU28 $ 157.6 vu 2.8Australian Direct investment abroad: 2015United States $ 105.2 vv 20.7United Kingdom $ 81.3 vu 3.2New Zealand $ 60.5 vu 0.5Singapore $ 21.2 vu 61.7China (b) $ 14.1 vu 12.3Germany (b) npPapua New Guinea (b) npASEAN $ 37.6 vu 28.2EU28 $ 111.8 vu 3.2

Australia’s trade and investment with the US

(a) Excludes some confidential items of trade.(b) Data for PNG and Germany were not published by the ABS for 2015.

DFAT estimates that the value of investment would be around $14bn to $15bn. Therefore they have been ranked equal 5th with China. For more Australian trade and investment statistics see: www.dfat.gov.au/trade

Australia's exports to the United States, 2015 by broad category

Agriculture 22.7%

Minerals & fuels 1.8%

STM (a) 5.5%

ETM (b) 23.7%

Other goods 10.6%

Services 35.7%

22,114A$m

(a) Simply transformed manufactures. (b) Elaborately transformed manufactures.

Australia's imports from the United States, 2015 by broad category

Consumption goods 17.5%

Capital goods 25.7%

Intermediate & other goods 25.5%

Services 31.3%

48,086A$m

United States investment in Australia, 2015 (stock)

Direct 20.2%

Portfolio 30.4%

Other 49.5%

860,313A$m

Australian investment in the United States, 2015 (stock)

Direct 17.7%

Portfolio 58.9%

Other 23.4%

594,425A$m

Based on ABS data.

Department of Foreign Affairs and Trade business envoy

AcknowledgementsBusiness envoy brings insights from Australia’s global diplomatic network to the Australian business community. It considers global geopolitical events and trends, their economic implications and what they might mean for Australian business.

Business envoy is produced by the Economic Advocacy & Analysis Branch of the Department of Foreign Affairs and Trade (DFAT). Any views expressed within are those of DFAT officers and not the views of the Australian Government.

DFAT does not guarantee, and accepts no legal liability arising from or connected to, the accuracy, reliability, currency or completeness of any material contained in this publication. DFAT recommends that readers exercise their own skill and care with respect to their use of this publication and should obtain professional advice relevant to their particular circumstances.

With the exception of the Commonwealth Coat of Arms and where otherwise noted, all material presented in this publication is provided under a Creative Commons Attribution 3.0 Australia licence. Material in this publication can be shared or adapted for any purpose in accordance with the licence terms available on the Creative Commons website.

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