The Fedtrade® podcast recently interviewed Tony Davis, Head of North and Latin America at the Australian Trade and Investment Commission (Austrade). Austrade helps grow Australia’s prosperity by delivering quality trade and investment services to businesses, accelerates growth in Australia’s tourism sector. and promotes Australia’s education to the world.

Learn more about Austrade on their website or follow them on LinkedIn. Connect with Tony on LinkedIn.

Key Takeaways:

  • Austrade’s strategic focus in the U.S. is centered on three main areas – critical and enabling technologies; defense, space, and security; and agri-business, food, and consumer.
  • It is critical to understand the complex federal and state legal and regulatory landscape, as well as the time, cost, and necessary steps.
  • Focus, prioritization, and segmentation are essential for Australian companies entering into the enormous U.S. market.

[a copy of the written transcript is here]:

Hello, welcome to Fedtrade®. I’m James Hastings of Rothwell Figg. Joining us on the podcast today is Tony Davis, Executive General Manager, The Americas of the Australian Trade and Investment Commission (“Austrade”). Tony will be sharing with us their mission and how it helps Australian businesses expand in overseas markets, including the United States. Tony, welcome to Fedtrade®.

Thanks very much, James. It’s a pleasure to be here and thanks for the invitation to the Fedtrade® podcast today. I’m really pleased to be able to shed some light on the work that the Australian Trade and Investment Commission in the Americas does and more importantly here in the United States.

Great. I understand you’re known also as Austrade.

Correct. So Australians love to shorten names down to their simplest forms. So we actually did that to our federal agency name. So Austrade is a separate and statutory federal agency and we were formed under our own parliamentary act way back in 1985. And that’s basically to help Australian companies win overseas business for their products and services and to reduce all of the costly time and risk involved in selecting, entering, and developing international markets. And we also do the same thing for foreign investors seeking to build their businesses in Australia. Austrade is the agency that reports to our Minister for Trade and Tourism, which is the equivalent of your Secretary of Commerce. One of the other more important aspects of Austrade’s role is to help accelerate growth in Australia’s tourism sector. We do have a policy remit to drive that sector with support from Tourism Australia and to lead and promote our education sectors and institutions around the world. As you would expect from a federal agency, we’re also very keen to provide quality policy advice to our government to move and grow Australia’s prosperity. Basically, we want to be the voice of business inside the government tent. The agency globally has over 60 international locations and over 500 experienced personnel in those markets to deliver outcomes. So, Austrade is a very commercial focused delivery agency and I’m sure your listeners will be pleased to know we’re not here to push pieces of paper from the in-tray to the out-tray.

That’s good to hear. What types of Australian companies or entities does Austrade serve?

Well, we serve a very, very wide range of companies. And I guess the simplest way to describe Austrade’s support sweet spot are the earlier to medium stage growth companies. I mean, they form the bulk of the export businesses in the sectors that we address. And I can certainly outline where we focus here in the United States within those market sectors.

And basically we want to make sure that those companies get the biggest bang for the Aus trade buck, because at the end of the day we’re spending their money as taxpayers when they use our in-market business development services. Now that’s not to say that we don’t actively help our larger Australian businesses because we certainly do. But once they get to a certain scale here in the United States they become much more self sufficient. That’s pretty obvious and common across most international marketplace. But we take a very deliberate portfolio view of our company’s support and who we service. So that includes the pyramid of value from large, medium, and smaller scale companies.

You just mentioned the size, small to medium entities that primarily work with Austrade. What are the sectors within the United States market that you generally assist?

Yeah, so the sectors, it’s a tale of two halves for Austrade and I’ll touch on both halves because I think it’s important. They’re mutually supportive in many ways. So from a trade perspective, we help our exporters, as I said, large, medium, and small, grow their businesses with our network of posts here in the United States, because this is the topic of conversation. With that sort of deep sectoral knowledge, with the right market advice, insights, contacts, and strategy and support to get it done.

From a trade perspective, our strategic focus in the United States is centered on three main areas. The first is critical and enabling technologies, which includes things such as artificial intelligence, quantum computing, biotech, and advanced information systems technology. Australia and the United States have had a very strong alliance over many, many years, dating back more than a hundred years in fact when we first found ourselves on the same battlefield in Le Hamel, France where our forces were literally side by side. So defense, space, and security is a very high priority for us both. Especially with the recent AUKUS agreement and alignment of our export controls that provides a license free environment for most of defense trade that takes place between our two countries. And last but not least, from a trade point of view, what we call our agri-business food and consumer segment, which is a very broad range of great, safe, high quality products such as beef, lamb, wine, dairy, seafood, packaged food, and consumer products. And also within that segment, our team has quite a sharp focus on supporting our innovative First Nations businesses in this market, especially with connections to their equivalent of First Nations reps in the U.S.

The second half is about our investment support. We promote and actively support U.S. companies with highly productive foreign direct investment opportunities in Australia. And again, in those investment areas, our proactive national priorities of relevance here are again critical and enabling technologies, defense, space and security, and also critical minerals, which has a very strong geopolitical economic security overlay and that’s providing plenty of challenges for both the United States and Australia. Importantly, net zero energy transition from an investment perspective. In the U.S., we have a strong focus on battery energy storage systems, the battery active materials that make up that supply chain. Also, low carbon liquid fuels with a strong emphasis on sustainable aviation fuel and the very hard to abate sectors, renewable energy and also those related initiatives. Our regional investment teams actively contribute to the Australian government’s future made in Australia agenda by attracting investments in those sectors that will help us deliver on our net zero commitments and also ambitions. Now despite being a fraction of the size of the U.S., we are a leader in addressing the energy transition to a net zero future. We don’t shy away from that nor from the many challenges that we all face achieving that ambitious goal.

Many of the sectors that you mentioned are high tech sectors. In your experience, how important is intellectual property protection in the United States?

Well, I guess that’s important everywhere. I think one of the things we like to do with our companies is make sure that we give them the right advice. One thing that we don’t profess to do is to know everything about every market. But we do try to know the in-market specialists that can really help our exporters journey. So when it comes to intellectual property, clearly it depends on the sector and the company. There’s no hard and fast rule. Of course, we certainly look with them at their specifics, but also look at the risks faced by failing to protect IP and also the trademarks, as well as the cost versus the benefit of seeking really what I call watertight legal protections. In most cases, we will refer to our expert service providers – lawyers, business consultants, and companies such as the team at Rothwell Figg for those detailed discussions and support. We do supplement that with connections to the relevant government agencies, industry bodies, and also the local business chambers who’ve got good insights into the challenges of intellectual property protection within specific sectors, because it’s not a one size fits all and I’m sure you’re aware of that.

Yes, and with respect to those high tech sectors or other ones such as food, there are still federal U.S. regulatory compliance issues that must be met.

Absolutely, and I think that’s a really good point. It’s important again in any jurisdiction, not just here in the U.S. It is absolutely critical that our Australian exporters understand the complex federal and state legal and regulatory landscape. So that’s why we do spend quite a bit of time trying to connect them with the right experts and companies that can support that journey, including the foundation of their own company base and the the legal entities. James, you’re well aware that navigating unfamiliar government terrain is a universal construct, but we also do the same for U.S. companies wanting to invest in Australia. So it’s a two-sided coin for Australia and U.S. And you’ve raised a really good point here. And I’ll just give you a classic example. In our agribusiness, food and consumer trade segment, we absolutely have to make our exporters fully aware of the U.S. FDA requirements for approval, labelling, and food safety that will be expected of any importer. Now, of course Australia has very high and similar standards but there’s not a direct one-to-one correlation and the businesses need to be aware of the time, the cost, and all of the necessary steps to be able to address that market opportunity. The bottom line is if they don’t, they will fail. And that means lost time, unnecessary cost, additional steps, and if you’re in the ag food sector, a high value perishable export could be completely lost if those regulations are not fully understood.

Are there any common challenges that Australian startups or established companies have in seeking to go to market in the United States that you’ve encountered?

For sure. At the end of the day, it becomes a little bit of a laundry list. But there certainly are some common themes from my experience having lived and worked here in the United States, previously within U.S. companies but also in the companies that my team supports here. And if I just address the sweet spot of Austrade’s portfolio, we’re talking companies with revenues between $1 to $30 million in that small to medium growth phase. The U.S. market is enormous. It’s the biggest in the world. It’s far larger than ours. So for an Australian exporter, it kind of feels at times being a bit like a lion on the Serengeti Plains during the Great migration. So many opportunities for the kill, but what are you really going to chase down? So that’s the first thing. Focus and prioritization and segmentation of the enormous opportunities of the states within the United States, let alone the country. And business culture. As some Australians will say about Americans, we’re separated by a common language. Whilst we have things in common in the way that we do business, in general, the Americans will talk a bigger game. Whereas Australians are a little bit more conservative and quite frankly sometimes don’t blow their trumpet hard enough. We’re kind of renowned for not liking tall poppies in our country. But here in the United States that can be an impediment. Expansion of their business development and management teams to go local, you know, that can be quite challenging, especially doing it with a remote team and a different culture. And the way that we sell here in the United States, as I said, is a little different to the way that we do it at home. Definitely state and the site selection is really important because there are really important subtle regional differences and incentives as to where to establish your local presence and your legal entity. And if you get it right, that can be good. And if you get it wrong, it can make a big difference. For the startups, there is the additional challenge of tapping the enormous capital potential from venture capital and private equity markets here in the U.S. There are far more options to choose from, so you need to know who you’re dealing with, what their motivation for the investment in your company is, and to honestly, choose wisely. As I said earlier, my feeling is that Australia’s kind of natural, understated modesty at times can sometimes be an impediment when you’re engaging with the U.S. VCs and private equity markets. And maybe we need to take a lead from our U.S. cousins and perhaps talk up our game a little more. My experience with the VCs and PDs is it’s probably better to go a little bigger initially than to start too small and lose the enthusiasm.

And as part of the services that you offer to Australian companies in the United States market, you do have discussions with various venture capital and private market entities. Is that correct?

Yes, for sure. And one of the areas where we do this is with a really strong part of our trade service offering through what we call our “landing pads.” And they’re a really good incubator for those sorts of discussions with venture capitals. “Landing pads” from Austrade are there to help the high tech exporters and those scale-ups expand in the new markets. So within a landing pad, globally what we do, and it’s the same here in the United States, we offer onshore here in the United States, residencies for these companies, coaching by entrepreneurs in residence, in market connections, and as you’ve pointed out, James, those really vital introductions to partners and venture capital. Our landing pad in this country is sensibly, in my view, given the high tech focus, based in San Francisco, and we have many of our graduate companies from that landing pad program that have enjoyed success here.

In reviewing Austrade’s website, there were some very interesting opportunities available to both U.S. companies seeking to do business in Australia, as well as Australian companies seeking to do business overseas. One of them is the Go Global Toolkit. Can you tell us a little about that?

Yeah, for sure. Before I talk about our Go Global toolkit, it’s actually quite similar in some ways to SelectUSA’s website. To be honest, we work very closely with the U.S. Commercial Service for investors coming into our country and also here in the United States. I’ve had a look at the SelectUSA website and it’s really got some great information to help Australian businesses learn more about your country and the incentives offered by the many different states and territories here. And as they rightly say on their website, the USA is a premier destination for Australian investment and I’d have to say vice versa. So with our Go Global toolkit, it’s really a comprehensive online support system that provides the useful tips, pointers, and tools early enough for exporters to get familiar with the market and the challenges and opportunities. It includes the basic sort of market search to fit your company and your product base. Also handy tools to test your own readiness. James, you’ll understand this. If you’re going offshore, especially into a market like the United States, you can spend a lot of time and a lot of air miles, which is good for your own personal rewards program but is incredibly costly. If you pick the wrong market, then try to prosecute the market only to find out that if you’ve done a little bit more readiness research, you may have gone somewhere else. It also addresses the difficult things, such as what are the export rules from Australia and also the import rules. It has a tariff finder, which is obviously very topical. As well as export planning guidelines on how to actually get it done. And it also provides up-to-date news and wires of things that are relevant in the various markets where we operate around the globe, including the United States.

Various entities will also be pleased to hear that you have export market development grants.

Yeah, so EMDG or the Export Market Development Program is administered by Austrade. We have on any given Sunday, in any given year, a hundred million dollars or so of grant funding available for our companies to access to support their expansion internationally. And the Export Market Development Program is designed to help them market and promote their goods and services globally, including here in the United States, and also to undertake the relevant export training to prepare them for the journey. So that’s been a strong feature of helping companies by giving them funding to actually go and prosecute international markets.

Is there anything else you would like to share about Austrade and/or the opportunities that are available working with you and your team?

Look, I think we’ve covered the majority of it, but I also think now is probably a good time, James, just to step back a little and just talk about the broader relationship between Australia and the United States when it comes to trade and investment. But more importantly, how long we’ve been together and how long we’ve been working together. As I said earlier, this relationship that we have goes back over 100 years. When 9-11 occurred here in this country, it was Australia that immediately invoked our joint security treaty, the ANZUS Treaty, that was signed back in 1951, to come quickly to the defense of the United States. And that was the only time our collective treaty defense article had ever been invoked. It was invoked by Australia, not the U.S. We willingly stepped in. We weren’t dragged along. So between our two countries, we’ve been here through the good and bad. We’ve stood together and could count on each other when it mattered most. And that won’t change anytime soon. You’ll be aware we have strong cooperation that spans foreign policy, defense and security, intelligence through the Five Eyes community, energy, environment, critical tech, critical supply chains, and of course, trade and investment. Interestingly, it’s this year that the United States-Australia Free Trade Agreement is in its 20th anniversary year after it was signed back in 2005. And our trading relationship has been a really significant enabler for our joint economic growth. It’s led to the doubling of two-way trade, tripling of two-way investment, the creation of hundreds of thousands of jobs, and the closer and in current geopolitical times, sensible integration of our economies. I mean, I think it’s important that the audience understands Australia and the United States have a really strong trading and investment relationship. The U.S. is our third largest two-way trading partner in goods and services, generating $84 billion each and every year for the U.S. And here’s the simple fact. The U.S. has enjoyed a significant trade surplus with us every year since Harry Truman was president in the White House all the way back to 1952.

That’s impressive.

Last year, it was the U..S’s second largest trade surplus with Australia at $32 billion. So that’s the trade. On the investment front, you’re our largest and most significant investor. Your investments in our country currently stand at $1.17 trillion in 2023. Likewise, the U.S. is also Australia’s largest foreign investment destination, with investment from our country in this country at 1.2 trillion in 2023. Over 150,000 Americans are employed by Australian companies operating in the United States. So we have a long-standing partnership that thrives on innovation, advancing technologies, fostering research, and tackling the pressing global economic and national security challenges. And that’s what we need to keep doing in the future.

Tony Davis, Executive General Manager, The Americas of the Australian Trade and Investment Commission. Thanks for joining us today.

Thanks very much, James. It’s been a pleasure.