Australian ambassador pitches country as entry into Eastern Hemisphere
Contributed Photo
Australian Ambassaor Jeffrey Bleich (far right) visits with (from left) Electric Boat spokesman Chris Lane, President Kevin Poitras, and Vice President for Business Development Kristin Fletcher in Groton.
With much of the world’s new business involving China and other Asian countries, Connecticut businesses need to familiarize themselves with that half of the globe, trade experts say.
“Australia is a good first step. Australia is Asia on training wheels,” said Jeffrey Bleich, the U.S. ambassador to Australia. “Come to Australia first, cut your teeth, and then expand to the rest of Asia.”
On Sept. 21, Bleich and U.S. Rep. Joe Courtney (D-CT) will host a trade mission to Australia for Connecticut businesses to explore money-making opportunities. The plan is to start firms on a continent with a free trade agreement where the language and culture is similar to the U.S. before they leap into Asia.
For Connecticut companies, only 1 percent of goods are exported anywhere, and 59 percent of those exports go to North America or Europe, said Bleich. The market growth is in Asia, which West Coast states have realized for years but the idea has been slow to catch on for the East Coast.
Connecticut firms do recognize the importance of Eastern Hemisphere. Companies predict in the next three years Asia will be the No. 1 exporting destination for Connecticut products, comprising 29 percent of all exports, according to the 2013 International Trade Survey of Connecticut Businesses conducted by the Connecticut Business & Industry Association.
“There definitely is a shift of market opportunity,” said Peter Gioia, CBIA vice president and economist. “China has slowed somewhat, but it is still at 8 percent growth.”
Embarking into a new market requires some easy first steps, like enabling a company Web site to be translated into different languages, Gioia said. Only 20 percent of Connecticut companies’ Web sites have that capability.
“This is not a lot of effort,” Gioia said. “Compared to paying to travel to these other countries, the investment to upgrade their Internet capability … is significantly smaller.”
Not only can Australia be a good first step into Asia, but the country is a significant market unto itself, Gioia said, taking in $148 million in Connecticut products in 2012. Its currency is strong compared to the American dollar, and Australia has a high demand for American products.
General Dynamics Electric Boat in Groton has had an established relationship with Australia since the mid-1990s, providing engineering for the country’s submarine fleet. It’s one of Electric Boat’s two main international trading partners along with the United Kingdom.
“We welcome any work anywhere, but we work in Australia under a foreign military sales agreement,” said Robert Hamilton, spokesman for Electric Boat. “We have been told to expect more work in the next generation.”
Australia is good not only for submarines, but its entire military sector, which can benefit from major Connecticut manufacturers like Pratt & Whitney of East Hartford, said Bleich.
“That work radiates down to the entire economy, the whole Connecticut supply chain,” Bleich said.
Connecticut’s exports to Australia have been sporadic over the past 10 years, fluctuating as the state sends the country large transportation equipment orders. The country is the No. 20 biggest trading partner with Connecticut.
Beyond selling products, Australia has other opportunities, Bleich said. The country has the third largest sovereign wealth fund in the world and a fully funded pension program, making it ideal for investing in foreign ventures and research in Connecticut.
“There are spaces of opportunity in Australia that people in Connecticut may not immediately appreciate,” Bleich said.
By establishing themselves in Australia, companies from Connecticut are giving themselves a launching pad for opportunities in the rest of the Eastern Hemisphere, said Courtney. Japan, Vietnam, and the Philippines all are looking to upgrade their military capabilities.
“There is no question that a lot of these countries are looking to upgrade their defense forces,” Courtney said. “Australia is a good place for Connecticut companies to get acclimated to that part of the world.”
An eastern presence will be more important if the Trans-Pacific Partnership expands to include the United States and other countries in the region. The free trade agreement among Chile, New Zealand, Singapore, and Brunei is under negotiations to include the U.S., Canada, Japan, Australia, Vietnam, Mexico, Peru, and Malaysia.
“You get that one worked out, and it is going to make it so much easier for Connecticut companies to trade with Asia,” Bleich said. “For Connecticut companies to remain strong, they need to look to Asia for opportunities.”
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