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Australia closer to a free trade pact with EU but minister warns there won’t be a deal ‘for the sake of it’

The Guardian | 15 February 2023

Australia closer to a free trade pact with EU but minister warns there won’t be a deal ‘for the sake of it’

Australian and European Union negotiators believe they are getting closer to clinching a free trade agreement as they race to meet a mid-year deadline, but the Albanese government warns it will “not sign a deal for the sake of it”.

Guardian Australia understands officials finalised three chapters of the agreement – on competition, telecommunications and maritime services – during a round of negotiations last week in Canberra.

This is believed to remain a sticking point because there has been no shift in Australia’s position.

The thorny issue of geographical indicators – the EU push to restrict the use of terms such as prosecco and feta by Australian producers – were raised during the talks.

Australia argues the EU should respect the terms of the existing wine agreement between the two sides, which allows continued use of grape variety names such as prosecco. Australia also wants food producers to be able to use terms such as feta.

The trade minister, Don Farrell, told Guardian Australia: “We made good progress during the most recent round of negotiations.”

Despite that progress, Farrell sought to assure Australian producers that he would push for an ambitious agreement that substantially increases access to the European market. “We will not sign a deal for the sake of it,” he said.

“Negotiations will only be concluded when we have a deal that is in Australia’s national interest and one which delivers commercially meaningful, new market access for our world-class agricultural products.”

Farrell also put Australia’s case when he met on Tuesday with his Swedish counterpart, Johan Forssell, who visited Canberra with Crown Princess Victoria and Prince Daniel.

“We appreciate Sweden’s strong support, as the current president of the Council of the European Union, to conclude trade negotiations by mid-year,” Farrell said.

Officials hope the next formal round of negotiations – due to be held in the EU in April – could be the final such round before the broad shape of a deal is agreed.

But in an attempt to resolve outstanding issues in the lead-up to those formal negotiations, Australian and EU officials plan to continue discussions over the coming weeks.

A statement published by the EU said both sides “showed a shared commitment to negotiate an ambitious and comprehensive agreement and work as intensely as possible towards its conclusion”.

The Australian government regards the push for a free trade agreement with the EU as a key priority, even as it seeks to stabilise the relationship with its largest trading partner, China.

Farrell held a video conference with his Chinese counterpart, Wang Wentao, last week – the first conversation between an Australian trade minister and a Chinese commerce minister in three years – and plans to visit Beijing to continue those talks soon.

Despite the arrival of an Australian coal shipment in China last week, and signs of progress on lobster and timber exports, the disputes about Beijing’s hefty tariffs on wine and barley may be more difficult to resolve because they are before the World Trade Organization.

The Australian government has told exporters that trade diversification remains important to reduce risks of overreliance on one market.

“In business, relying on one major client is a high-risk strategy, and I encourage Australian businesses to continue diversifying their markets,” Farrell said.

He is due to travel with the prime minister, Anthony Albanese, to India next month to deepen trade ties, and the government also hopes the UK soon allows its free trade agreement with Australia to enter into force.

At high-level talks in the UK two weeks ago, the foreign affairs minister, Penny Wong, and the defence minister, Richard Marles, said Australia “looked forward to the UK’s timely ratification of the FTA”.

The proposed deal between Australia and the EU cannot be compared with the UK free trade agreement because the draft text has yet to be released and sticking points need to be resolved in coming months.

 source: The Guardian