Australia enjoys a remarkable benefit from its multi-faceted, two-way investment relationship with the United States. And while Australia’s trade relationships, particularly in the region, are vital to continued growth and prosperity, the United States remains Australia’s indispensable economic partner.

Since its founding, Australia has been a heavy importer of foreign capital, and that foreign capital is a crucial driver of employment, economic growth, and also the ability to export. While much is often made of Australia’s important trading partners, including China, the important investment partners make those trading relationships possible by providing the necessary capital and know-how for production of goods and services.

The cumulative value of two-way investment between the United States and Australia is more than A$1.47 trillion, a number nearly as large as Australia’s gross domestic product. Representing more than a quarter of all foreign investment in Australia for many decades, the cumulative stock of US investment in Australia is currently A$860 billion: That’s A$345 billion more than the next largest investor, the United Kingdom, and approximately ten times more than Chinese investment in Australia.

These investments are indicative of a long and deep relationship between countries that have a great deal in common. Secure property rights and procedural fairness – backed by the rule of law and democratic political institutions in both countries – mean that Australia’s economic relationship with the US spans access to capital, technological diffusion, and knowledge transfers. In each of these domains, the United States is Australia’s most valuable partner.

This report addresses three fundamental components of the US-Australia investment relationship:

  • its size, history, and economic impact
  • the role of capital markets
  • the “spillover effects” from foreign investment, namely skills and knowledge transfers

The report takes a multi-pronged approach, analysing this vital relationship from a variety of angles.

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