“The government obviously wants businesses to diversify and be present in India and Indonesia [but] it’s much easier said than done,” Mr Ivanov said.
“These [free trade deals] are government-to-government agreements. But is it actually viable to really diversify from China? And if it is viable, then what are the successful models that we can look at?”
Trade Minister Simon Birmingham backed the inquiry, saying the government had worked hard to “open new doors for our exporters” and it was timely for businesses to “better take advantage of these opportunities to access fast growing markets”.
The 12-month inquiry will focus on ASX200 companies and will have input from Austrade and the Department of Foreign Affairs. It will make policy recommendations to government on how to “prepare for a more strategically and economically competitive region”.
While annual two-way trade with Asian countries including China has reached $526 billion, Mr Ivanov said Australia’s “business presence on the ground is actually significantly under-done”.
The task force would not look specifically at China, he said, but the US-China trade war was “probably a factor in why we’re doing this” because it had rattled executives into exploring other options.
“The trade war itself pushed a lot of board rooms and CEOs into thinking: if China is their biggest market, and if [China’s] relationship with the US … is going to deteriorate, business might be caught in the crossfire,” Mr Ivanov said.
Last year ANZ’s Opportunity Asia Report found Australian businesses stood to gain $393 billion in revenue if they acted on plans to expand operations in Asia; an increase of $115 billion from the previous year.
Ms Westacott said Australia needed to avoid “complacency” when it came to trade and investment in Asia. Growing Australia’s business footprint on the continent would also help “create new jobs at home”, she said.
The Foreign Policy White Paper emphasised the Indo-Pacific’s role in Australia’s economic and security interests, noting its “massive and wide-ranging” infrastructure needs. In particular, it outlined India’s “striking economic potential”.
However, bilateral trade has not necessarily matched expectations. Australia’s two-way trade with Indonesia is about $16.8 billion a year compared to $26.8 billion with New Zealand, for example.
Michael Koziol is a political correspondent for The Sydney Morning Herald and The Age.