Trade refers to the movement of goods and services between economies. International trade has historically played a very significant role in the small, open Australian economy. Australia's economy only produces 2% of the global economic output, making it relatively unimportant on a global scale. However trade with the rest of the world is very important to Australia, adding almost 50% of Australia's economic output.

Since globalisation has occurred Australia has become increasingly dependant on the rest of the world, evident through the increasing trade intensity. The value of exports of goods and services increased from $102, 239m in 1994-5 to $152, 528m by 2002-3. This represents a 49% increase in trade volumes over a period of nine years. Similarly imports of goods and services grew from a total value of $103, 152m in 1994-5 to $175, 396m by 2002-3, a 71% increase in nine years. Both in the past and continuing into the future internationally trade...