Australia has withdrawn from trade talks with the European Union (EU) on a free trade agreement for the second time in three months.
Australia’s Trade Minister Don Farrell, who met with European representatives during a Group of Seven meeting in Osaka, expressed his frustration on the matter. “We’ve not been able to make progress.” While expressing hope for future success, he added, “Negotiations will continue, and I’m hopeful that one day we will sign a deal that benefits both Australia and our European friends,” Bloomberg quoted him as saying.
The negotiations between Australia and the EU have been ongoing for over five years, with broad consensus achieved in most areas. However, the stumbling block has been related to agricultural issues.
Australia has been pushing for increased access to the European market for products such as beef, mutton, and sugar, while Brussels has been advocating for the elimination of certain geographic locators on products like Prosecco and feta.
The European Commission expressed its regret over the lack of progress, mentioning that the Australian side had reintroduced agricultural offers that did not reflect recent negotiations.
The recent talks in Osaka were considered a last chance for both parties to reach an agreement in the near future. The failure to strike a deal now may result in significant delays, with the possibility of months or even years before an agreement can be reached. Although cautious optimism existed, neither Canberra nor Brussels was entirely convinced that a deal could be struck.
The EU Trade Commissioner Valdis Dombrovskis had previously stated that the deal was “within reach”, along with some remaining hurdles to overcome.
For both Australia and the EU, reaching an agreement is of utmost importance.
The centre-left Labour government in Australia is in need of a political win following the failure of a national referendum it supported, which aimed to establish an Indigenous advisory body. The government has faced criticism for not giving enough attention to economic matters, and a free trade deal with Europe could help counter this narrative.
On the other hand, the administration of European Commission President Ursula Von Der Leyen is eager to secure a trade victory after a previous unsuccessful attempt to remove steel and aluminium tariffs imposed by former President Donald Trump’s administration in the United States. Additionally, the EU is facing challenges in concluding an agreement with the Mercosur bloc, which includes countries like Brazil, Argentina, Paraguay, and Uruguay.
(With inputs from Bloomberg)