Australia, EU say trade deal likely years away after rejecting terms

The two sides can't agree on agricultural trade
calendar icon 31 October 2023
clock icon 2 minute read

Australia has rejected European Union proposals for a free trade agreement, and a deal is now unlikely to be reached for several years, Reuters reported, citing Australian government ministers on Monday.

The largest farm industry group thanked the government for refusing to "throw Aussie farmers under a bus" by signing a deal it said would not have let enough of their products into the EU.

The two sides have been negotiating since 2018, with Australia eager to boost agricultural exports by removing EU tariffs and expanding quotas, and Europe likely to gain greater access to Australia's critical minerals industry.

Australian Trade Minister Don Farrell said after a meeting of Group of Seven (G7) trade ministers in the Japanese city of Osaka over the weekend that no progress had been made.

"I came to Osaka with the intention to finalise a free trade agreement," Farrell said in a statement.

"Unfortunately we have not been able to make progress," he said. "Negotiations will continue, and I am hopeful that one day we will sign a deal that benefits both Australia and our European friends."

Australia's agriculture minister, Murray Watt, said the EU - one of the world's largest markets - had only slightly tweaked the proposal it put on the table three months ago.

"We just weren't able to see the EU increase its offer for things likebeef, sheep, dairy, sugar, enough for us to think that this deal was in Australia's national interest," he told ABC Radio.

EU trade chief Valdis Dombrovskis said the bloc had "presented a commercially meaningful agricultural market access offer to Australia, while being mindful of the interests of the European agricultural sector".

"Unfortunately, our Australian partners were not able to engage on the basis of previously identified landing zones. We were therefore unable to make progress," he said.

'Duo deal'

Australia's Watt said it would be some time before the Australian government and EU leadership would be able to negotiate a deal because of upcoming elections in the EU.

Australian farm groups had pressured the government not to sign a "dud deal" that would put their members at a disadvantage to competitors in New Zealand, Canada and South America, who have greater access to EU markets.

The EU signed a trade deal with New Zealand last year that lowered tariffs for EU exports including clothing, chemicals and cars, and allowed more New Zealand beef, lamb, butter and cheese into the EU.

"It's disappointing the Europeans weren't willing to put something commercially meaningful on the table," National Farmers' Federation President David Jochinke said in a statement.

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