Aboriginal settlers arrived on the continent from Southeast Asia about 40,000 years before the first Europeans began exploration in the 17th century. No formal territorial claims were made until 1770, when Capt. James COOK took possession in the name of Great Britain. Six colonies were created in the late 18th and 19th centuries; they federated and became the Commonwealth of Australia in 1901.

PEOPLE
Australia's aboriginal inhabitants, a hunting-gathering people generally referred to as Aboriginals and Torres Straits Islanders, arrived more than 40,000 years ago. Although their technical culture remained static--depending on wood, bone, and stone tools and weapons--their spiritual and social life was highly complex. Most spoke several languages, and confederacies sometimes linked widely scattered tribal groups.

HISTORY
Australia was uninhabited until stone-culture peoples arrived, perhaps by boat across the waters separating the island from the Indonesia archipelago more than 40,000 years ago. Portuguese, Spanish, Dutch, and English explorers observed the island before 1770, when Captain Cook explored the east coast and claimed it for Great Britain (three American colonists were crew members aboard Cook's ship, the Endeavour).

ECONOMY
Australia's advanced market economy is dominated by its services sector (70% of GDP), yet it is the agricultural and mining sectors (7% of GDP combined) that account for the bulk (57%) of Australia's goods and services exports. Australia's comparative advantage in primary products is a reflection of the natural wealth of the Australian continent and its small domestic market; 20 million people occupy a continent the size of the contiguous United States. The relative size of the manufacturing sector has been declining for several decades, and now accounts for around 11% of GDP.

U.S.-AUSTRALIA RLEATIONS
The World War II experience, similarities in culture and historical background, and shared democratic values have made U.S. relations with Australia exceptionally strong and close. Ties linking the two nations cover the entire spectrum of international relations--from commercial, cultural, and environmental contacts to political and defense cooperation. Two-way trade reached $25 billion in 2003. More than 400,000 Americans have visited Australia in a single year.

Area: 7.68 million sq km
Capital City: Canberra
Language: English
Government: independent member of the Commonwealth of Nations
Head of Government: Prime Minister John Howard
GDP per capita: US$22,000
Inflation: 2%
Major Trading Partners: Japan, ASEAN countries, South Korea, China, New Zealand, USA, EU