At the G7 meeting in Osaka over the weekend, EU and Australian trade representatives failed to reach a free trade deal after disagreements over agricultural market access.
The work on this free trade agreement was initiated back in 2018 but was temporarily halted in 2021 after Australia chose the United States and the UK over France in a submarine deal.
In July, when it appeared that a trade deal was within reach, Trade Minister Farrell abruptly withdrew from negotiations in Brussels, after claiming to be dissatisfied with the European market access offers.
He also said he would return to Australia to consult with the rest of the government, adding:: “Negotiations will continue, and I’m hopeful that one day we will be able to sign a deal that benefits Australia and our European friends.”
EU officials expressed surprise at this turn of events, but negotiations continued on a technical level. The primary unresolved issue revolves around agricultural market access. Australia is seeking improved market access for its sheep meat and beef producers, a proposition that faces resistance from the EU, especially from countries like France and Ireland.
Both Australian and European agriculture lobbies have been actively involved in these negotiations, exerting pressure on their respective decision-makers. The EU Commission is keen on reaching an agreement before the end of the year, considering the potential personnel and priority shifts that could arise with EU elections in mid-2024.
The implications of Sunday’s failure to reach an agreement remain uncertain at this time; although, before the meeting, Minister Farrell had indicated that a failure to reach an agreement would mean a temporary pause in the negotiations.
A spokesperson of the European Commission said that the Commission regretted “the lack of progress made during talks in Osaka.” The spokesperson added: “There was optimism that a deal was within reach. The Australian side re-tabled agricultural demands that did not reflect recent negotiations and the progress made between senior officials.”
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