EU, Australian Officials Work to Set Stage for Trade Talks’ Launch
Efforts continue apace for the expected launch of EU-Australia trade talks, with Australian Trade Minister Steven Ciobo in Europe over the past week to meet with EU Trade Commissioner Cecilia Malmström, as well as ministers from various EU member states, regarding the deal’s next steps.
“An Australia-EU FTA will create new opportunities for Australian businesses; driving exports, economic growth and job creation. Launching negotiations will also send an important message to the world at a time of rising protectionism,” said Ciobo in announcing the trip.
Officials from the Czech Republic, Hungry, Poland, and Slovakia reportedly lent their backing to the prompt launch of negotiations following meetings with the Australian trade chief last week, according to comments by Hungarian trade minister Peter Szijjarto. The Hungarian official called for the Council to sign off on the talks’ launch next month and for the negotiations to start shortly thereafter.
Advocates for a potential EU-Australia deal say that it could yield impressive economic benefits, slashing tariffs on goods trade and improving market access on services and investment, along with making it easier for regulators to cooperate and thus lower trade costs.
In an interview dated November 2017, Australian Prime Minister Malcolm Turnbull noted that the EU is “[the] only remaining major trading partner with which we don’t have a free trade agreement. We must seize the opportunity to achieve one.” (See Bridges Weekly, 9 November 2017)
On the EU side, proponents have similarly noted that Australia and neighbouring New Zealand are among the few countries that do not have a formal trade accord with the European bloc or are in the process of negotiating one. Given that context, officials from all three sides say that setting up new trade agreements is paramount to avoid losing potential opportunities to other countries who have better trading terms under their existing FTAs.
Australian exports to the European bloc are made up primarily of mining and farm goods. The EU, for its part, sends large numbers of manufactured goods and agri-food products to the Oceanic island nation, according to the bloc’s statistics, along with exporting commercial services worth €20 billion annually.
Years of preparation
The parties formally began laying the groundwork for future trade talks over two years ago, and have held numerous discussions over what should fall under a trade deal’s scope. Another negotiation expected to launch this year is for the planned EU-New Zealand FTA, which was announced at the same time as the EU-Australia version.
More recently, the EU Commission published last September its proposed negotiating directives for both trade deals, asking that the European Council discuss and sign off on final versions in the new year. The timeframe for when these processes may advance through that stage is not yet confirmed, however.
A separate “impact assessment” on an EU-Australia trade deal, released as a Commission staff working document, flagged market access in goods, services, and public procurement; small and medium-sized enterprises (SMEs); intellectual property rights (IPR) and geographical indications (GIs); harmonisation of technical regulations; and conformity assessment procedures as areas they hope to see addressed in the upcoming trade talks.
Agriculture is expected to be a major component of the trade talks, given the importance of the sector for the EU, Australia, and New Zealand. The European bloc is the third largest trading partner for both Oceanic countries, along with being a major source of investment.
Both accords have been designated a top priority by European Commission President Jean-Claude Juncker, who publicly called for these to advance during his State of the European Union speech last September. (See Bridges Weekly, 14 September 2017)
The EU Commission chief had also urged that these talks proceed rapidly in order to clinch deals before the current five-year mandate of the EU’s executive arm ends in 2019.
Australia and New Zealand already have close ties between them, trading nearly A$25 billion (US$20 billion at today’s exchange rate) in goods and services in 2016, according to Australian government statistics. The Oceanic neighbours are working to put in place a “Single Economic Market” strategy that could boost investment flows and slash trading costs.
They are also both members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will be signed in March, as well as being parties to a separate trade deal with the Association of Southeast Asian Nations (ASEAN), among other initiatives.
ICTSD reporting; “Central European countries urge start of free-trade talks between EU, Australia,” XINHUA, 20 January 2018.