Australia’s $10bn EU trade deal has stalled again. What is it and what’s gone wrong?
After a decade of tough negotiations, the Albanese government does not yet have the numbers it needs to get a hard-won free trade deal over the line.
Talks with the European Union were finalised in March, and Labor expects to introduce the agreement to parliament early in the new year. But the deal, worth $10bn a year, is already facing opposition from the Coalition and meat producers urging the government to go back to the drawing board.
The trade minister, Don Farrell, has warned there is no room to renegotiate the agreement, saying “we’ve got to either accept or reject this offer”. He rejected demands from some farmers to walk away from the deal because their industry did not get everything they wanted.
Under the agreement, Australia and the EU have also agreed to step up their cooperation on critical minerals. Canberra used the nation’s supply as a bargaining chip during the negotiations.
What is the deal?
When the agreement enters into force, 98% of Australia’s goods exported to the EU will enter duty-free. The deal will unlock the bloc’s market of 450 million people, worth about $30tn.
Regarding travel, there will be no change to entry requirements for Australian tourists, students or working holidaymakers.
The federal government argues the agreement does not impose new legislative or regulatory changes on sustainability. It does include a binding commitment to respect the Paris climate Agreement, which Australia is already a signatory to.
The FTA also outlines commitments on preserving “biodiversity, sustainable forestry, and sustainable fishing”.
What does it mean for Australian products?
For beef, it guarantees preferential access of 35,000 tonnes of carcase weight equivalent (CWE) a year into the EU and includes 30,600 tonnes of new market access.
This marks a nearly eightfold increase on Australia’s previously guaranteed access.
For sheep meat, access of 30,851 tonnes (CWE) a year is guaranteed and includes new market access of 25,000 tonnes, representing a fivefold increase on previously guaranteed access. The EU will also remove tariffs on 87.3% of dairy products.
Australia has agreed to protect geographical indicators for European products, which shows that goods come from a specific place – for example champagne, for sparkling wine from the Champagne region of France.
But the federal government secured concessions for certain terms such as the free use of parmesan, while other products such as feta will be grandfathered.
What’s the problem?
Australian farmers and meat producers are not happy with the access secured, with the National Farmers’ Federation arguing at least 50,000 tonnes of carcase weight of beef access is “reasonable”.
For lamb, at least a minimum of 67,000 tonnes should be on the table, the group says.
But vegetable growers have come out in support of the deal, saying their industry will benefit through the elimination of duties on Australian vegetables into Europe.
Businesses are also urging the parliament to back the agreement, with the Australian Chamber of Commerce and Industry warning the opportunity for “substantial market access benefits for Australian exporters across a very broad range of sectors” would not come back if lost.
Is the free-trade agreement dead?
The nationals leader, Matt Canavan, has declared the Coalition is opposed to the deal in its current form, pointing to the unhappy farmers.
“The farm sector has always been a supporter of free trade. Their reaction shows the weakness of this deal,” he told ABC radio.
Liberal MPs have said the deal “deserves a careful read”.
Labor lacks a majority in the Senate, which means it needs either the Greens or the Coalition to pass legislation. The Greens are still considering the agreement with the EU, and are yet to declare whether they will support it, or move to block it.
The Greens’ trade spokesperson, Sarah Hanson-Young, said the minor party will decide its position in due course, with the final text of the deal not yet completed.
“I will be kicking the tires on the agreement’s climate and environmental commitments to see what they actually deliver. Commitments are one thing, how they are implemented is what really matters,” she said.
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