EU-Australia Trade talks postponed

European Commission and senior MEPs play down any link to Canberra’s controversial pull-out from French submarine deal.
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By Andreas Rogal

Andreas Rogal is a Brussels-based journalist and copy editor

04 Oct 2021

Talks on a Free Trade Agreement between the European Union and Australia have been postponed by Brussels, in what is seen as further fallout from the formation of a new strategic alliance between Australia, the UK and the US (AUKUS).

The surprise announcement of the Pacific-Asia alliance last month came with Australia cancelling a deal with France for a fleet of conventional submarines worth €32bn, which has angered Paris greatly. Australia now aims to procure nuclear powered submarines from the US. 

The postponement of the next round of Free Trade Agreement (FTA) talks - originally scheduled for 12 October - by a month had first been made public early on Friday by the Australian government.

“Postponement does not mean cancellation. The negotiations are not easy. There still are important differences, like on the access of Australian agricultural products to the EU market, on the recognition of the geographical designation of origin by Australia, or on Australian car taxation” Bernd Lange, chair of the European Parliament’s International Trade Committee (INTA)

Reuters reported Australian Trade Minister Dan Tehan as stating: "I will meet with my EU counterpart Valdis Dombrovskis next week to discuss the 12th negotiating round, which will now take place in November rather than October.” According to the news agency, Tehan declined to comment on what part, if any, the submarine deal had played in delaying negotiations.

The European Commission confirmed the decision but also made no reference to AUKUS related issues, stating instead that the negotiations were “focused on substance over speed. A one-month delay will also allow us to better prepare," a spokesperson said.

The Chair of the European Parliament’s International Trade Committee (INTA), German Social Democrat Bernd Lange, also put the delay into the context of the negotiations when he commented to The Parliament Magazine:

“Postponement does not mean cancellation. The negotiations are not easy. There still are important differences, like on the access of Australian agricultural products to the EU market, on the recognition of the geographical designation of origin by Australia, or on Australian car taxation.” 

Lange added that in terms of policies, climate action and workers’ rights were two areas where Canberra and Brussels were also not aligned yet, leaving him to conclude that “a delay of one month is not going to make a significant difference, as a fast conclusion could not be expected in any case”.

He did, however acknowledge the fallout from AUKUS by commenting that the decision “is a sign that trust has clearly been diminished.” 

A sentiment shared by French Renew Europe Group MEP Marie-Pierre Vedrenne, who told us: 

“The postponement of a new round of negotiations between the EU and Australia is proof that achieving a trade deal hinges on keeping your word. Trust is a minimum prerequisite, especially when it comes to an ally.”  

The INTA Vice-Chair She also underlined that a great number of differences still had to be overcome before an agreement could be reached. 

By contrast, Romanian deputy Iuliu Winkler, also an INTA Vice-Chair commenting to The Parliament Magazine, argued for a continued engagement with Australia, and for the dialogue to be stepped up:

“In a complex and interlinked world, bilateral relationships are increasingly difficult to manage. Whatever differences may appear in EU-Australian relations, the underlying reality of this relationship is that we are natural, like-minded partners.”

“In a complex and interlinked world, bilateral relationships are increasingly difficult to manage. Whatever differences may appear in EU-Australian relations, the underlying reality of this relationship is that we are natural, like-minded partners” Iuliu Winkler, vice-chair of the European Parliament’s International Trade Committee (INTA)

To his mind, the EU and Australia shared common interests on a large scale, including in trade and investment. Winkler concluded that “right now, amid tensions, dialogue is essential. I continue to believe that an EU-Australia FTA is a shared interest of our economies, our companies and our people.” 

The centre-right EPP Group MEP called for “immediate engagement and efficient dialogue (…) to facilitate the resumption of the trade agenda”.

The 12th round of the trade talks is supposed to deal with a wide range of trade and investment aspects, including intellectual property rights. 

According to the Commission’s DG Trade, the EU is Australia's third-biggest trade partner: “bilateral trade in goods has risen steadily in recent years, reaching almost €48bn in 2017. Bilateral trade in services added an additional €27bn”. 

With an FTA in place, trade in goods and services between the two partners could increase by around a third, according to an impact assessment.

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