Australia has walked away for the second time in three months from talks with the European Union toward a free trade deal.
”We’ve not been able to make progress” in the talks with Europe, Australia’s Trade Minister Don Farrell said in a statement on Sunday from Osaka, where he met European representatives on the sidelines of a Group of Seven meeting. “Negotiations will continue, and I’m hopeful that one day we will sign a deal that benefits both Australia and our European friends.”
The two sides have been working on a free trade agreement for more than five years and while there was broad consensus across most areas, a few remaining agricultural issues were threatening to derail the entire compact. Australia was pushing for greater access to the European market for its beef, mutton and sugar, while Brussels wants an end to the use of certain geographic locators on products such as Prosecco and feta.
“The European Commission regrets the lack of progress made during talks in Osaka,” the body said in an emailed statement. “The Australian side re-tabled agricultural offers that did not reflect recent negotiations and the process made between senior officials. The European Commission stands ready to continue negotiations.”
Read more: EU-Australia Trade Deal in Balance as Endgame Talks Begin
The talks in Japan were seen the last chance for a deal any time soon, with both sides warning before they began that that a failure to strike a deal now may delay it by months or even years. After Farrell and the Australians walked out of the last round of negotiations in July, neither Canberra nor Brussels was completely convinced that a deal could be struck, though there was cautious optimism that it could finally happen.
In one sign that there was an expectation that the deal was ready to be done, the EU sent the Agriculture Commissioner Janusz Wojciechowski to Japan to participate in the talks.
EU Trade Commissioner Valdis Dombrovskis had told reporters in Osaka on Saturday that the deal with Australia was “within reach” with some hurdles remaining. Farrell told Australian media earlier on Sunday that he’d been talking with the French delegation over the weekend in Osaka to try to reach a breakthrough.
Both sides have real cause to reach an agreement.
For Australia, the center-left Labor government needs a win after the heavy defeat of a national referendum it backed to set up an Indigenous advisory body. It’s been criticized by opposition figures for not focusing enough on the economy and a free-trade deal with Europe would counter that narrative.
Meanwhile, the administration of European Commission President Ursula Von Der Leyen needs a victory on trade after a missed attempt with the US to remove steel and aluminum tariffs imposed by former President Donald Trump’s administration. It’s also having difficulty concluding an agreement with the Mercosur bloc that includes Brazil, Argentina, Paraguay and Uruguay.