EU Commission: Promising Start to Negotiations for Australia, New Zealand Trade Deals

2 August 2018

The European Commission recently circulated reports about the early negotiating rounds with Australia and New Zealand, respectively, for free trade agreements (FTAs) with both countries, indicating that both processes had seen some promising advances since they were formally launched in late June. 

The two nascent trade negotiating processes have been touted by all sides as a way to support new trade rule-making, along with making sure that their trading relationships become even more commercially competitive in light of the plethora of trade agreements that both sides are involved in with other partners. Prior to the talks’ launch, some officials had floated the possibility of wrapping these accords up in 2019, though a formal timeline has not been set.

The current European Commission finishes its term on 31 October 2019, with President Jean-Claude Juncker not seeking a second term at the helm, meaning the EU’s executive arm will see a shake-up the same year as the European Parliament elections.

The next Australia election, meanwhile, must be held next year as well, though dates have not been set. New Zealand is operating on a longer electoral timeframe, given that the coalition government of Prime Minister Jacinda Ardern took office just one year ago.

Exchanges of proposals, practices

According to the EU’s executive arm, it has put forward a suite of proposals that cover various negotiating areas for the initial discussions with Australia and New Zealand.

For the Australia talks, the EU has submitted proposals on topics such as customs and trade facilitation, dispute settlement, energy and raw materials, public procurement, intellectual property, mutual administrative assistance in relation to customs, rules of origin, small and medium-sized enterprises, state-owned enterprises, technical barriers to trade, goods trade, and trade remedies.

Meanwhile, Australia has also submitted proposals in some areas as well, such as intellectual property rights. The EU summary of the negotiations indicated that this first round was largely meant to review proposals, along with how different processes such as public procurement work in the European Union and Australia, and get a better understanding of shared objectives in several areas. These include, for example, how to tackle different aspects of services trade and investment liberalisation. State-to-state dispute settlement was another topic examined, as the two negotiating teams reviewed how each side has addressed in the issue in other free trade accords.

They also looked at the planned sustainable development chapter of the FTA, reviewing how the subject is addressed in their other trade agreements. The European Commission summary noted that the two sides specifically talked about an “action plan” that Brussels released in February on sustainable development and EU FTAs. (See Bridges Weekly, 1 March 2018)

The EU’s report on the New Zealand talks, meanwhile, also indicated a “constructive atmosphere” during the first round of talks in Brussels. That round was also primarily focused on exchanging ideas, proposals, experiences in different subject areas, and expectations going forward.

Brussels has put forward proposals on customs and trade facilitation, dispute settlement, energy and raw materials, public procurement, intellectual property, rules of origin, small and medium-sized enterprises, state-owned enterprises, technical barriers to trade, goods trade, and trade remedies.

Both sides are already looking at getting ready for making market access offers in goods, once modalities are reached and other data is shared. They already made some progress in discussions on the text of a goods chapter, according to the EU Commission report, which said that “it was possible to agree on three basic articles and achieve a substantial agree of convergence on several others.”

Neither side has submitted proposals on services trade, though talks are underway in this area to understand Wellington’s and Brussels’ practices, approaches, and interests, and what a services chapter could look like here. They have also indicated interest in a dedicated chapter on digital trade, though neither the EU nor Zealand has submitted proposed text for this area.

They also have some agreed text in topics such as intellectual property rights and small and medium-sized enterprises, with more work forthcoming on both chapters. In many areas, the negotiators looked at their existing FTAs and commitments at the WTO, along with how to improve on these in an EU-New Zealand accord.

Ciobo: Current FTA negotiations could cover 88 percent of trade

Meanwhile, Australian Trade Minister Steve Ciobo gave a speech in Melbourne on 31 July outlining Canberra’s approach to its future trade policy, with free trade agreements with key partners at its core.

“The main way the Government brings more opportunity within the reach of more Australian businesses is through trade agreements. The strategy is as simple as it is ambitious. As the rules-based trading system comes under pressure from above, we are carefully crafting together a network of binding trade relationships from the ground up,” he said.

He also said that if the Australian government successfully completes all FTA negotiations that it is a part of, which includes multi-country Pacific Rim accords and the ongoing talks with the EU, among others, that it would mean that over 88 percent of Australia’s bilateral trade would be covered by some sort of trading agreement.

The trade deal with the EU, he said, “could be Australia’s biggest FTA,” and would ensure that Canberra has competitive trading terms in place with Brussels.

His New Zealand counterpart, Trade and Export Growth Minister David Parker, has similarly stressed the importance of inking a trade accord with the 28-nation European Union.

“The EU is one of New Zealand’s largest economic partners. We share significant history, culture and values, and yet we currently discriminate against each other on trade. I’m pleased that this anomaly will soon be addressed,” he said last month when talks were launched.

Parker also said at the time that these talks could allow Wellington and Brussels to enshrine their shared values in a formal trade accord, thus helping achieve sustainable development objectives and ensuring inclusive growth.

“We want an agreement that contributes to sustainable development by addressing issues affecting climate change, gender equality, indigenous rights, labour and environment standards, and that supports small to medium sized enterprises and spreads the benefits of trade more widely,” he said.

ICTSD reporting.

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