Australia PM: EU, TPP-11 Accords Can Help Support Rules-Based Economic System
Advancing on trade rule-making in various regional contexts – including negotiating an EU-Australia trade accord and advancing the Trans-Pacific Partnership (TPP-11) process – could play a valuable role in supporting the multilateral trading system, said Australian Prime Minister Malcolm Turnbull last week.
The EU and Australia are “key partners in reinforcing the rules-based economic system,” Turnbull said in the Western Australian city of Perth on 4 November. “It is our only remaining major trading partner with which we don’t have a free trade agreement. We must seize the opportunity to achieve one.”
In his speech, the prime minister also commented on the current geopolitical climate when it comes to trade, warning against inward-focused policy and political approaches.
“Continuing prosperity assumes we do not close our doors to the flow of people, capital, imports, or ideas. That we don't turn in on ourselves, taking populist comfort in protectionism. That we don't forget the lessons of the 1930s,” he said.
He also referred specifically to some of the challenges facing today’s global trading landscape, including within the WTO context.
“The siren songs of populists, advocating protectionism as simple quick solutions, have gained considerable support. Moreover, there is a real risk that rising major power tensions – tensions between assertive state capitalism in China and populism in the United States – could undermine the stability of the World Trade Organization’s rules-based trading system and its all-important mechanisms for settling disputes,” Turnbull said.
With the US pulling out of the Trans-Pacific Partnership (TPP) earlier this year, the 11 remaining members have spent the past several months negotiating how to advance with the accord.
While not yet confirmed, observers note that the TPP-11 preparations could lead to an agreement on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit. However, negotiators will still need to contend with differing opinions on which provisions to put on hold or revise in order to proceed with ratification, and also address requests for changes to investor-state dispute settlement (ISDS) clauses that have been requested by the new government in New Zealand.
Proponents of the accord say that it could be a landmark deal, both in economic heft and in setting a new bar in trade rule-making, even without the US currently on board.
“If we are to maintain the dynamism and prosperity of the Indo-Pacific, then we have to reinforce the rules-based structure that has enabled it thus far,” said the Australian premier in explaining his approach to the TPP-11. He also suggested that the deal should ensure that any economy willing to match the group’s ambition and standards should be able to sign on – including China.
EU lawmakers visit Australia, New Zealand
The Australian leader’s remarks came just days after EU parliamentarians signed off on resolutions backing draft “guidelines” for free trade agreements with Australia and New Zealand, respectively.
This includes, for example, negotiating better access when bidding on government contracts in Australia; addressing sensitivities in the area of farm trade; and ensuring the right to regulate in the public interest. The resolutions give an indication of lawmakers’ priorities in the talks, and the European Parliament will have to sign off on any completed deals.
The European Commission has already proposed draft mandates in both negotiations, with the European Council expected to endorse final versions by December in order for talks to kick off in the new year. (See Bridges Weekly, 14 September 2017)
Some of the EU’s key parliamentarians on trade praised the vote last week, while also noting that the 28-nation bloc’s recent accord with Canada could serve as a useful template for talks between Brussels and Canberra.
“Now we have a blueprint, it’s not starting point-zero. I hope that this might go quite smoothly over 18 months to two years,” said Bernd Lange, the EU parliamentarian who chairs the committee on international trade, in comments to The Australian newspaper.
Meanwhile, Daniel Caspary, the EU parliamentarian serving as the “rapporteur” on the Australia and New Zealand trade pacts, said last week that the vote was a promising sign of shared commitment to trade openness.
"While protectionism is on the rise in other parts of the world, the EU's trade agenda is on track: the trade negotiations with Australia and New Zealand will bring us closer to each other and pave the way for new jobs and more growth," he said.
EU trade lawmakers also visited both Oceanic nations last week, as part of the effort to prepare for the talks, including possible sensitivities and challenges that may arise.
Along with the EU parliamentary delegation that visited Australia and New Zealand last week, the German President, Frank-Walter Steinmeier, visited both countries this week for the 2017 Asia Pacific Regional Conference and other high-level meetings. This reportedly included leaders’ level discussions on trade with both Turnbull and New Zealand Prime Minister Jacinda Ardern.
ICTSD reporting; “German President touches down in New Zealand for high-level meetings,” STUFF.CO.NZ, 6 November 2017; “EU Australian trade deal could be signed by 2019,” THE AUSTRALIAN, 6 November 2017; “TPP trade talks, minus the US, close to final stretch,” THE STRAITS TIMES, 2 November 2017.