The Lima Agreement was a significant economic policy decision made by the Australian government in 1975 under former Prime Minister Gough Whitlam. The accord, signed at the United Nations Conference on Trade and Development in Lima, Peru, sought to address the challenges faced by developing countries in the global economy.

At the time, the world economy was undergoing a significant shift due to the rise of oil prices and the emergence of new export markets. Developing countries were struggling to compete in this new economic landscape and were often forced to rely on the export of raw materials to survive.

The Lima Agreement sought to address this imbalance by calling for developed countries to provide greater access to their markets for the products of developing countries. It also called for increased financial and technical assistance to help developing countries build their own industries and infrastructure.

The agreement was significant for Australia as it marked a departure from the country`s traditional reliance on trade with Britain and the United States. Instead, it signaled a new commitment to engaging with the countries of the Asia-Pacific region.

However, the Lima Agreement proved to be controversial, with critics arguing that it led to inflation and a decline in living standards for many Australians. This controversy, combined with other economic and political challenges, ultimately led to Whitlam`s dismissal by the Governor-General in November 1975.

Despite its controversy, the Lima Agreement remains an important moment in Australian economic history. It signaled a new commitment to engaging with the economies of the Asia-Pacific region and demonstrated Australia`s willingness to take a leading role in addressing the challenges faced by developing countries in the global economy.