The Australian Financial Review | 22 November 2023
Collapse of EU free trade deal opens door for Middle East
by Andrew Tillett
Talks to create a historic economic pact with the United Arab Emirates are being revived as the Albanese government tries to reboot its free trade agenda after negotiations with the European Union soured over agriculture.
A free trade deal with the UAE would be Australia’s first with a Middle East country.
Two-way trade was worth $9.2 billion in 2022, bouncing back strongly from COVID-19, which shut down air travel between Australia and the UAE, one of the major economic bridges between the two countries.
The UAE is Australia’s largest trade and investment partner in the Middle East. Aluminium ores and concentrates are Australia’s biggest export to the UAE.
Senior government sources told The Australian Financial Review the government was turning its eye to countries like the UAE as free trade partners.
The UAE has been knocking on Canberra’s door for a while for a deal, with the Morrison government in its final months proposing to create a comprehensive economic partnership agreement.
The Department of Foreign Affairs and Trade is seeking submissions from interested stakeholders on the merits of a deal with the UAE.
The UAE has made its fortune on oil and gas but has spoken about its commitment to the green energy transition and net zero. That could provide opportunities for Australia’s renewable energy sector and attract UAE investment in critical minerals. The country will host the latest round of global climate talks starting next week.
In a speech to the Italian Chamber of Commerce on Wednesday, Trade Minister Don Farrell will reaffirm the government’s support for trade liberalisation. It recently updated the ASEAN-Australia-New Zealand free trade agreement and is finalising domestic treaties to support Britain’s entry to the trans-Pacific free trade deal.
Negotiations with India
Senator Farrell will say strong progress has been made on an expanded Indian economic deal, with seven rounds of negotiations so far.
He will also say Australia remains committed to striking a free trade deal with Brussels, although European parliamentary elections would mean it will be some time before talks reconvene.
Negotiations collapsed last month after Senator Farrell felt the EU had not offered sufficient access for beef, sheep, dairy and sugar exports and did not give enough ground over geographical indicators.
“My assessment was that the EU was asking too much, and offering too little, to conclude a fair deal which benefited both sides,” Senator Farrell will say, according to speech notes.
EU ‘significant market’
“This isn’t the end of the road – the EU is still an important partner for Australia, and it will continue to be a significant market and a significant investor for Australian businesses.
“So while it may take some time, we’ll keep working towards the EU FTA, alongside work on a range of other agreements.”
Senator Farrell will say the government’s Trade 2040 Taskforce – made up of leaders from industry and unions, academics, civil society groups and bureaucrats – met for the first time earlier this month.
The government is consulting the taskforce to shape Australia’s trade policy over the next two decades and ensure the benefits are shared by all.
“That mix [of members] is purposeful – we’re putting people with diverse expertise and experience at the centre of our trade policy to make sure Australia is best placed to harness trade opportunities in the decades to come,” Senator Farrell will say.