Australia-EU Trade Deal at Risk During Impasse Over Market Access

2023-07-11 10:27

Australia and the European Union’s negotiations to conclude a free-trade agreement are at an impasse over Canberra’s concerns

Australia and the European Union’s negotiations to conclude a free-trade agreement are at an impasse over Canberra’s concerns that the bloc is offering insufficient access to the nation’s agricultural exports.

Trade Minister Don Farrell, who arrived in Brussels this week for talks with EU counterpart Valdis Dombrovskis, is unhappy with the market entry offered by the EU for Australian beef, sheep and sugar. Farrell said he is prepared to walk away from the negotiations if the EU fails to improve its position.

“I will not go back to Australia with the offer that’s currently on the table,” Farrell said in a statement ahead of a second day of negotiations on Tuesday. Both Australia and the EU had said they wanted to see the FTA finalized by the end of the European summer, and negotiations had seemed to be nearing a conclusion.

Prime Minister Anthony Albanese backed his trade minister’s tough stance at a press conference with German Chancellor Olaf Scholz on Monday in Berlin.

“Ultimately, our negotiations with the EU will only be concluded when we have a good deal, and one that includes new market access for our agricultural products,” Albanese told reporters.

The EU was Australia’s third-largest two-way trade partner — worth A$97 billion ($65 billion) in fiscal 2022 — and second-largest source of foreign investment, according to the Department of Foreign Affairs and Trade.

National Farmer Federation Chief Executive Tony Mahar said that while he didn’t want to see “years of hard work” wasted, he backed Farrell’s readiness to end the talks if the EU’s offer wasn’t improved.

“We are better to walk away than to agree a dud deal. We’ve made that point clearly to Minister Farrell here in Brussels,” Mahar said in a statement on Tuesday. “We’d rather this take a few extra months if necessary.”

New Zealand signed a deal with the EU over the weekend, which aimed to boost bilateral trade by 30% within a decade and investment into New Zealand by 80%. However, Australia is understood to want an FTA similar to that secured by Canada in 2014.