Australia’s Lima Declaration: Unpacking Its Legacy and Constitutional Questions
Origins and Intent of the Lima Declaration
The Lima Declaration, adopted in 1975, emerged from a United Nations conference in Peru, with the goal of promoting a more equitable distribution of global industrial capacity. The agreement, championed by developing nations, encouraged developed countries—including Australia—to support industrial growth in less industrialized economies, primarily through trade and cooperation37. The Whitlam government’s involvement in the declaration was seen by some as a commitment to international solidarity and economic justice.
Myths and Realities: Was Manufacturing “Given Away”?
A persistent narrative suggests that the Lima Declaration required Australia to slash its manufacturing sector by 30% and increase imports from developing countries. However, this claim has been repeatedly debunked by experts and fact-checkers15. The declaration was not a legally binding treaty; rather, it was a set of aspirational recommendations. Australia was never under any legal obligation to reduce its manufacturing capacity or to import a specific quota of goods15. In fact, Australia’s delegation at the time expressed reservations about several parts of the document, and the government retained full sovereignty over domestic industrial policy5.
The Real Drivers of Manufacturing Decline
While the Lima Declaration is often cited as a turning point, the decline of Australian manufacturing is more accurately attributed to a range of domestic policy choices and global economic trends:
- Tariff Reductions and Trade Liberalisation: From the 1980s onward, successive Australian governments implemented policies to lower tariffs and open the economy to international competition. This shift, coupled with the rise of global supply chains, led to increased imports and the offshoring of many manufacturing jobs56.
- Rising Energy and Input Costs: Australia’s manufacturing sector once benefited from low energy costs, but recent decades have seen significant increases in gas and electricity prices, eroding the sector’s competitiveness6.
- Shifting Economic Priorities: As manufacturing’s share of GDP declined by nearly two-thirds since the late 1970s, the mining sector expanded, doubling its share of the economy and further shifting national focus away from manufacturing6.
Current State of Australian Manufacturing
Despite these challenges, Australia’s manufacturing sector continues to show signs of resilience. The S&P Global Australia Manufacturing PMI has remained above 50 for much of 2025, indicating ongoing, albeit modest, growth8. Businesses have responded to increased demand with higher output and job creation, though concerns about supply chain disruptions, input costs, and trade uncertainty persist8. Australia now has one of the lowest manufacturing shares in the OECD, reflecting both global trends and local policy choices6.
Constitutional and Democratic Considerations
The Lima Declaration’s adoption did not involve direct public consultation, prompting ongoing debate about transparency and democratic accountability in international agreements17. Critics argue that major decisions affecting national industry should involve greater scrutiny and public input, especially when they intersect with economic sovereignty and constitutional principles.
Australia’s Constitution grants Parliament authority over trade and commerce, but it does not prescribe specific industrial or trade policies5. The government’s power to enter into international agreements is balanced by the expectation that such decisions serve the national interest and reflect the will of the people.
Enduring Debate and Calls for Review
Nearly fifty years on, the Lima Declaration remains a touchstone in debates about Australian industry, sovereignty, and global responsibility. While some view it as a symbol of lost industrial strength, others see it as a misunderstood document whose impact has been overstated. The real story of Australian manufacturing is shaped by a complex interplay of policy, economics, and international trends—not by a single UN declaration156.
As Australia continues to navigate global economic shifts, the lessons of the Lima Declaration era inform ongoing discussions about how best to balance international cooperation, domestic industry, and constitutional values.
Citations:
- https://www.aap.com.au/factcheck/australias-manufacturing-sector-wasnt-killed-by-1975-un-declaration/
- https://pmtranscripts.pmc.gov.au/release/transcript-3723
- https://www.unido.org/sites/default/files/2012-10/Lima%20Declaration%20and%20Plan%20of%20Action%20on%20Industrial%20Development%20and%20Co-operation_26.3.1975_0.PDF
- https://www.aph.gov.au/Parliamentary_Business/Hansard/Hansard_Display?bid=chamber%2Fhansards%2Fd7fb77b1-0930-425d-ad2a-6fd86946e453%2F&sid=0042
- https://www.aumanufacturing.com.au/un-declaration-never-required-australia-to-slash-manufacturing-fact-checkers-confirm
- https://www.macrobusiness.com.au/2025/01/australias-manufacturing-sector-bogged-deep-in-recession/
- https://auscastnetwork.com/article-category/looking-for-the-latest-in-business/the-lima-declaration-how-australia-sold-out-its-industries/
- https://tradingeconomics.com/australia/manufacturing-pmi
- https://en.wikipedia.org/wiki/Whitlam_government
