Latest : EU’s Australian trade deal collapses

No agreement “for two years” as EU fails in bid to emulate UK’s success

Montage © Facts4EU.Org 2023

Meetings planned for today with EU Commissioners are now cancelled

Last night Australia walked away from negotiations with the EU over a trade deal. It first did this three months ago but now it seems that the latest impasse is likely to last for two years before either side tries again.

Talks collapsed over the EU’s insistence on strict rules regarding agricultural produce. In a statement in the Japanese city of Osaka last night, the Australian Trade Minister Don Farrell said that no progress had been made after meeting EU Commissioner Valdis Dombrovskis on the fringes of the G7 Summit.

"I came to Osaka with the intention to finalise a free trade agreement. Unfortunately we have not been able to make progress. Negotiations will continue, and I am hopeful that one day we will sign a deal that benefits both Australia and our European friends."
- Don Farrell, Australian Trade Minister, 29 Oct 2023

Frustration for the Australians as the EU Commissioners won’t compromise

The reality is that no progress will be made for another two years. These negotiations started in 2018 at a time when the EU was desperate to show it was good at trade deals, following the UK’s dramatic progress in talks with countries around the world.

The EU wants Australia’s valuable minerals including lithium and Australia wants the EU’s market for beef, lamb and other produce.

Speaking to ABC Radio, Australia's agriculture minister, Murray Watt, said the EU Commission had only slightly amended the proposal it put forward three months ago.

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

Observations

The EU’s failure to reach an agreement with Australia last night will make for awkward reading in Brussels, which had trumpeted this proposed deal for years. The Commission started talks back in 2018, which makes the breakdown all the more frustrating for the Australians.

The EU’s failure is in marked contrast to the UK’s success

The UK and Australia signed a free trade agreement (FTA) in December 2021. This followed an ‘Agreement in Principle’ in June 2021, where most of the deal had been agreed.

The agreement came into effect at midnight on 31 May 2023. In its 32 chapters it covers a wide range of issues, including the removal of most tariffs on trade between the UK and Australia.

Other provisions cover trade in services, digital trade, public procurement and intellectual property. UK citizens aged under 35 will be able to travel and work in Australia more easily. There are provisions covering technical barriers to trade, and sanitary & phytosanitary (SPS) measures relating to food safety, and animal and plant health. There are also chapters on small business, the environment, and animal welfare.

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[ Sources: Australian government | Australian media | EU Commission ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, Mon 30 Oct 2023

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Reader Comments 26

11. jon iivesey , Monday, October 30, 2023, 16:22:

Sparky is forever telling us that Brexit has reduced trade with the EU and that this is a bad thing. This is wrong on two counts. First, the decline in trade with the EU has been going on for several decades. In fact, you could say the decline in trade caused Brexit because it made the EU less important for most people.
Secondly, trade with the EU is not a "good thing" because we run a monster trade deficit with the EU, about ninety *billion* a year. Every time a UK consumer buys a German car, that creates jobs in Germany, and that in turn means more wages, benefits, economic activity and tax revenue, but in Germany, not in the UK. The German economy is being stimulated to the tune of ten billion a year, just for cars, just for the UK. And who finances this? The UK consumer.
Our trade with the rest of the world is more or less in balance, sometimes in surplus, meaning that RoW consumers create as many jobs in the UK as we create in RoW. Oh, and in the RoW there is no "Brussels" that ever set UK trade policy to benefit itself.
Overall, the EU economy is being stimulated to the tune of ninety billion a year, year after year, by the UK consumer's cash, and the UK economy is not being stimulated by that amount. It would stimulate the UK economy if we manufactured all those cars in the UK. It would even have an effect on investment. What investor is going to put money in automobile manufacturing in the UK when they know that the cars will actually be manufactured in Germany.
If you look at the UK economy as a whole, we earn money by exporting very high-tech products to the rest of the World, and then we spend it to buy mid-tech products from the EU instead of using it to build our own economy. Is it any wonder that the Europeans mock us as fools and claim the UK as their own "Treasure Island"?
When we read that trade with the EU is declining, we should be glad that one very serious economic distortion is being corrected.

12. Gazzablack , Monday, October 30, 2023, 16:25:

8, Sparkless
If the ROI wants to re-accede to the United Kingdom then I'm sure our own government will promote 'Irish reunification' as well.

13. jon iivesey , Monday, October 30, 2023, 16:28:

8. Sparky , "AUSTRALIA’S LABOR PARTY, the country’s ruling political party, has passed a motion at its national conference supporting the reunification of Ireland." So what? The decision of NI's future is guaranteed to be in the hands of NI voters under the GFA. The Aussie Labour Party could just s well pass a motion to repeal the Law of Gravity for ll the difference it would make.
That's the nice thing about the GFA. It is a fact that makes a whole bunch of opinions completely irrelevant.

14. jon iivesey , Monday, October 30, 2023, 16:32:

12. Gazzablack , "If the ROI wants to re-accede to the United Kingdom then I'm sure our own government will promote 'Irish reunification' as well." Um, well, maybe, but let's not go too fast on that one. There are plenty of financial issues to deal with. ROI has different fiscal structures for its Health Service and Pensions as well as a banking sector that is in pretty dire shape. Irish reunification with the UK would not be without some pretty serious negotiations.

15. jon iivesey , Monday, October 30, 2023, 17:06:

10. Paul j , "Now it's Irish unification that will NEVER happen without them killing each other soon after." "Just like Scottish independence, its a dead subject." You may well be right, but I think that the important thing is that we live in a country where these things can be openly discussed, debated and voted on.
By contrast, Europe is a continent with a two thousand year history of savage warfare over this little region or that small sector leaving this country or joining that one. Germany and France tearing Lorraine and the Saar out of one another's hands has been an issue right into the 20th Century. I think we do pupils a disservice when we portray Europe as some well run and organized part of the World. In reality it is a mess of violent nationalisms, and the current situation is a anomaly in a European history of warfare and genocide. When we talk about Peace in Europe we should always add the word "temporary".
We talk as if the Irish Troubles single us out, but plenty of European countries have had dozens of "Troubles" and probably more to come. And ten EUs would be helpless to stop it.

16. John Jones , Monday, October 30, 2023, 17:10:

11.Jon Iivesey "Secondly, trade with the EU is not a "good thing" because we run a monster trade deficit with the EU, about ninety *billion* a year..."
Agreed although we do have a notional surplus in some services which isn't necessarily a bad thing.
A significant challenge for the UK is we are far too dependent on the EU for food imports - Which depending on who you look at ( & processed v unprocessed food) varies between 50-60%. We need to relook at food production in the UK for our own benefit. This still gives the EU great leverage in some negotiation situations. This government seems to favour tree planting over food resilience.
In many ways SMEs who have trouble exporting to the EU because of phyto sanitary controls ought to be able to sell intra UK /via substitution.
We have sweet FA food resilience currently & this ought to be a key benefit of Brexit ( reduced dependency on Dover, reduced transport & delivery).
Sadly I cannot see any future government addressing a national weakness.

17. jon iivesey , Monday, October 30, 2023, 18:02:

16. John Jones You are totally missing the point. What some people call "food security" isn't "national weakness" at all and nor does it give the EU any leverage. Every country has natural economic advantages and we use our advantages in skills and manufacturing to pay for food imports from countries that have n advantage min land and agriculture. This is not a "national weakness" but just how trade and economics works. If countries like the UK rig markets to pursue some will of the wisp "food security" goal then all economies become less efficient. If there is an emergency like 1939-45 then we will have to act to secure food supplies, but you don't distort your own economy for fifty years of peacetime to anticipate some five year emergency that may never happen.
Europe itself has had a totally irrational "food security" obsession since the days of the Revolution and the Napoleonic Wars and they have wasted huge amounts of money and distorted their economies to pursue this bogus aim. The French created an entire sugar beet industry for fear of a blockade of sugar by the UK, but being French they missed the obvious point that without French revolutionary aggression against its neighbours there wouldn't be a blockade in the first place. Don't launch wars of aggression, and then "food security" becomes a non-issue.
In the context of Brexit, "food security" is a completely fabricated issue whose entire function is to allow EU fans to talk as if we depend on the generosity of Europeans for our food, when in reality the Europeans are simply deadly afraid that in a World of free markets we can and are replacing them as our source of food imports.
A green pepper from North Africa is a green pepper. Cheese from New Zealand is cheese. Did you ever notice that?

18. John Jones , Monday, October 30, 2023, 19:03:

17. jon iivesey
Fascinating.
So, let's imagine a very simple scenario. If France & Netherlands & Spain all decided to prevent food exports from their respective countries, what in the short to medium term think would happen in the UK?
We saw a hint of the way things go during Covid when there was a run toilet paper ( no pun intended) - the challenge is that fresh food at the price points we are used to paying is going to be difficult if mainland EU starts to play up. We cannot easily air transport food ( at scale).
You did make me laugh here:
"..we use our advantages in skills and manufacturing to pay for food imports.."
We are a services based economy at c. 80% of GDP -we have been for years as our manufacturing base has steadily declined.
In benign trading conditions all is relatively fine - food & increasingly energy security ( please don't give me lectures on continental inter-connectors) and how France will honour its contractual obligations in times of crises.
The truth is we have relatively limited food & energy resilience - which, with Brexit, we really ought to be able to mitigate and fix in the longer term.
Again, the simplicity:
"A green pepper from North Africa is a green pepper. Cheese from New Zealand is cheese. Did you ever notice that?..."
The distribution & transport, stowage costs are likely very different - people wet themselves here when we couldn't get lettuce & tomatoes from Spain just over a year ago.

19. Gazzablack , Monday, October 30, 2023, 19:21:

14, Jon
I'm not making a case for re-accession, merely making a point.
.
Having said that, the issues that you rightly raise would be significantly more problematic for the ROI should NI secede from the UK.
.

20. jon iivesey , Monday, October 30, 2023, 19:43:

19. Gazzablack , "Having said that, the issues that you rightly raise would be significantly more problematic for the ROI should NI secede from the UK." I completely agree. People who say that NI can just "join" the ROI as if it's just a matter of changing a map hove not the slightest clue how complex it would be to merge such different funding structures.

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