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Australia walks away from EU trade talks over agriculture

Australia walks away from EU trade talks over agriculture
A farmer corrals cattle at a farm in Gunnedah, New South Wales, Australia, on Friday, May 29, 2020.

Australia has walked away for the second time in three months from talks with the European Union toward a free trade deal, almost certainly pushing any agreement into next year or beyond.

“We’ve not been able to make progress” in the talks with Europe, Australia’s Trade Minister Don Farrell said in a statement on Sunday from Osaka, where he met European representatives on the sidelines of a Group of Seven meeting. “Negotiations will continue, and I’m hopeful that one day we will sign a deal that benefits both Australia and our European friends.”

The two sides have been working on a free trade agreement for more than five years and while there was broad consensus across most areas, a few remaining agricultural issues were threatening to derail the entire compact. Australia was pushing for greater access to the European market for its beef, mutton and sugar, while Brussels wants an end to the use of certain geographic locators on products such as Prosecco and feta. 

“The European Commission regrets the lack of progress made during talks in Osaka,” the body said in an emailed statement. “The Australian side re-tabled agricultural demands that did not reflect recent negotiations and the progress made between senior officials. The European Commission stands ready to continue negotiations.”

The talks in Japan were seen as the last chance for a deal any time soon, with both sides warning before they began that a failure to strike a deal now may delay it by months or even years. After Farrell and the Australians walked out of the last round of negotiations in July, neither Canberra nor Brussels was completely convinced that a deal could be struck, though there was cautious optimism that it could finally happen.

In one sign that there was an expectation that the deal was ready to be done, the EU sent the Agriculture Commissioner Janusz Wojciechowski to Japan to participate in the talks.

EU Trade Commissioner Valdis Dombrovskis had told reporters in Osaka on Saturday that the deal with Australia was “within reach” with some hurdles remaining. Farrell told Australian media earlier on Sunday that he’d been talking with the French delegation over the weekend in Osaka to try to reach a breakthrough. 

Farrell’s decision to walk away from the talks was applauded by Australian business groups, farmers, and even the center-right opposition parties. The Australian Chamber of Commerce and Industry said they agreed with the government’s decision, while the National Farmers’ Federation said the free trade deal would have “disadvantaged” the country’s agriculture sector.

“Today’s decision was a hard one, but ultimately it was the right one,” NFF President David Jochinke said in a statement on Monday. “It’s disappointing the Europeans weren’t willing to put something commercially meaningful on the table.”

Other stakeholders were less sanguine.

Not concluding the deal in Osaka is a “disastrous result” for something that is strategically important to both sides, according to Jason Collins, chief executive officer of the European-Australian Business Council. “The Australian minister made clear that his agricultural stakeholders want an improved market access deal, which was what was expected to be negotiated and resolved here.”

Both sides have real cause to reach an agreement. 

For Australia, the centre-left Labour government needs a win after the heavy defeat of a national referendum it backed to set up an Indigenous advisory body. It’s been criticised by opposition figures for not focusing enough on the economy and a free-trade deal with Europe would counter that narrative. 

Meanwhile, the administration of European Commission president Ursula von der Leyen needs a victory on trade after a missed attempt with the US to remove steel and aluminum tariffs imposed by former President Donald Trump’s administration. It’s also having difficulty concluding an agreement with the Mercosur bloc that includes Brazil, Argentina, Paraguay and Uruguay.

“The window of opportunity is closing and there is no more time for delay, there is a deal ready to be done,” according to the EABC’s Collins, who was in Osaka for the talks. 

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