25 April 2018
The European Union is preparing to launch trade talks with Australia in June to strike a deal that would add $15 billion to both economies, including a push for more rights to geographic names such as parmesan cheese and Parma ham that are essential to European food brands.
The EU’s lead trade negotiator, Cecilia Malmstrom, said she hoped to visit Australia within weeks to start talks on a free trade agreement, which are likely to be authorised to proceed on May 20.
But she warned that European farmers will expect Australian producers to give ground on the divisive issue of geographic identifiers, which could stop Australian food companies using labels such as parmesan for cheese and Parma for ham.
Ms Malmstrom told Fairfax Media the agreement would serve a “strategic” purpose by creating a “circle” of allies to remove barriers at a time when US President Donald Trump has imposed steel tariffs that could trigger a trade war.
“The most important thing right now, with growing protectionism in the world and uncertainties coming from traditional allies, is to expand this circle of friends,” the EU trade commissioner said in an exclusive interview.
This means Europe could expect Australia to speak up for free trade against Mr Trump’s 25 per cent tariff on steel and 10 per cent tariff on aluminium to protect American producers.
Asked if Australia should back any challenge to the US at the World Trade Organisation, Ms Malmstrom said the EU had been talking to countries including Australia, Canada and Mexico about the dispute.
“I think it would be good if as many countries as possible joined, but I think we need to see how things develop in the week to come,” she said.
Ms Malmstrom was speaking soon after she met Prime Minister Malcolm Turnbull in Brussels on Tuesday alongside European Commission President Jean-Claude Juncker, where they discussed trade and security over lunch.
The meeting came one day after German Chancellor Angela Merkel issued vocal support for the EU-Australia Free Trade Agreement, saying Germany was in favour of meeting Australia’s wish for a deal.
This is a crucial moment in global trade relations as Australia, Canada, China, the EU and others wait for a final decision from the Trump administration by May 1 on who to exempt from the tariffs.
Australian officials are hoping to secure a permanent exemption but the EU is threatening to retaliate with a list of 300 American exports that will face new tariffs if the US does not back down.
“That is what we have tried to avoid, and that is also the very clear message that we have passed to the US – that we have this list and we have to react because we consider their tariffs as totally illegitimate,” Ms Malmstrom said.
“Again, I hope not, because we don’t want to escalate a conflict and it might lead to an escalation and this is what we are trying to avoid. We made that very clear to our American friends.”
The Australian negotiations with the EU are part of a broader agenda to reduce trade barriers under the Trans Pacific Partnership in Asia and the EU’s recent deals with Japan, Singapore and Mexico.
The EU executive needs authorisation from its 28 member states to start negotiations with Australia. Ms Malmstrom said this was expected “soon” and could happen at a council meeting on May 20.
This would clear the way for her to visit Australia in June for talks with Trade Minister Steve Ciobo.
The stakes are significant, with the EU scoping study for the deal concluding that the economic gain to the EU would be worth €4.9 billion, or about $8 billion, by increasing GDP by 0.02 per cent.
Australia stands to gain €4.2 billion, or about $7 billion, from a 0.2 per cent increase in its GDP.
“Of course we are facilitating for our companies to trade with each other and build tighter economic ties, but it is also strategic for both of us,” Ms Malmstrom said.
Australian officials believe the biggest objections to the deal will come from the farm lobbies in France, Ireland and Poland and that the worst-case scenario could stretch out the negotiations for years.
Mr Ciobo is aiming to conclude a free trade deal with Britain soon after it leaves the EU next year, but a deal with the EU could take longer. Under a “fast-track” process it requires approval from each member government but does not give local parliaments any veto power – a scenario that stymied a Canadian deal.
Australian producers are especially concerned about geographical indications, the rules that saw the labels Champagne, Port and Sherry banned from Australian wines in 2009, but the EU is determined to expand its list of “brand” names.
“That is an important issue in all our trade talks. That has been mentioned in the scoping study and that is in our mandate, and we’ll take it from there,” Ms Malmstrom said.
“Some of these iconic names in cheese and hams, they are very important for certain member countries.”
A different dispute flared two years ago when Australia’s anti-dumping authorities halted imports of tinned tomatoes from several Italian suppliers on the grounds they were being “dumped” below cost on the Australian market.
Ms Malmstrom said this was not a concern because similar disputes had been handled by the World Trade Organisation.
“We are working very hard now to strengthen the WTO and I have spoken to Mr Ciobo about how we can do that,” she said.
“You bring the cases to the WTO. There is a dispute mechanism. Sometimes you win, sometimes you lose, and then you carry on. That happens with countries with whom we are very close friends and also with countries where relations are maybe more tense. So that’s not a problem.”
European farmers have complained about the prospect of more Australian beef arriving in their supermarkets, but Ms Malmstrom said that issue could also be managed because the Australian trade deals with Japan, Korea and China had changed the market.
“With all the trade agreements that you guys have been making lately, there’s not a lot of beef left to export to Europe because you have other markets more closer,” she said.
“So I don’t think the beef issue is such a big problem. What we have seen is that, on the contrary, we can have the opening up of the service sector and public procurement. So this is a win-win for us and for you as well.”
1 March 2018
Media Release from The Hon Steven Ciobo MP, Minister for Trade, Tourism and Investment
Australia’s job-creating trade agreements are being widely used by Australian businesses, according to a research report released today.
The Free Trade Agreement Utilisation Study is the most robust and comprehensive evaluation of trade agreement utilisation in Australia to date.
The independent report reveals the trade agreements the Coalition delivered with China, Japan and Korea have been embraced by Australian exporters to tap into the north Asian powerhouse economies.
More than 80 per cent (by value) of eligible exports to China and Korea are benefitting from preferences secured under these agreements. In the case of Japan, this figure is as high as 95 per cent.
These trade agreements are delivering preferential access for Australian exporters, putting them in pole position to capitalise on the growing Asian market, which will be home to 3.5 billion middle-class consumers by 2030.
The report, by PricewaterhouseCoopers Australia (PwC), also finds trade agreements are having a positive impact on business confidence and activity.
The Turnbull Coalition Government is working to equip Australian businesses with the knowledge and know how to make the most of the country’s trade agreements so they can sell more of their products and services to the world. Doing so will grow trade, the economy and create new Australian jobs.
The Coalition’s FTA roadshow, which has travelled across the country teaching small businesses how to use trade agreements, will reach a milestone later this year, with its 100th seminar. The Turnbull Coalition Government is also continuing to expand the award-winning FTA Portal that provides easy-to-access information on trade agreements.
The Free Trade Agreement Utilisation Study was commissioned by the Department of Foreign Affairs and Trade, and is available on the DFAT website: http://dfat.gov.au/about-us/publications/trade-investment/Pages/free-trade-agreement-utilisation-study-pwc-report.aspx.
The 2018 Why Australia Benchmark Report provides rich data demonstrating why there is no better place than Australia to do business. The report examines five key reasons for investing in Australia – its Robust Economy, Dynamic Industries, Innovation and Skills, Global Ties and Strong Foundations – and compares Australia’s credentials with other countries.
The Austrade Why Australia: Benchmark Report 2018 can be found here
Business Envoy is a quarterly online publication issued by the Department of Foreign Affairs and Trade. It provides Australian business with the latest news and updates from the Australian Government’s global diplomatic network, offering perspectives and insights on the economic and market impacts of geopolitical events and trends. Business Envoy draws on reporting and advice from Australian embassies and high commissions in key trade and investment markets, as well as analysis and assessments on international issues from DFAT in Canberra.
The January 2018 publication of Business Envoy features an article highlighting the EABC’s work promoting and profiling Europe’s relationship with Australia (pg. 15). Specifically, the article refers to the EABC’s annual Business Missions to Europe and their role in facilitating discussions on common policy issues and in enhancing business opportunities. It showcases the success of the 2017 Business Mission to Amsterdam, The Hague, Brussels, Dublin and London, while also emphasising the importance of the 2018 Mission to Paris, Strasbourg, Lisbon and Madrid in the context of upcoming negotiations of the Australia-EU Free Trade Agreement, expected to launch later this year.
The January 2018 edition of Business Envoy also features an article on the European Parliament’s International Trade Committee’s visit to Thales Australia’s Garden Island premises in November (pg. 16). Ahead of the launch of Australia-EU free trade negotiations, the visit provided an opportunity to showcase the longstanding success of the French company in Australia.
The January 2018 edition of Business Envoy can be found here
19 January 2018
Media Release from The Hon Steven Ciobo MP, Minister for Trade, Tourism and Investment
As the Turnbull Coalition Government works towards launching Free Trade Agreement (FTA) negotiations with the European Union (EU) I will visit Hungary, France and Switzerland to meet my counterparts and business leaders.
In Budapest I will meet members of the dynamic group of European countries known as the Visegrád Group (V4) to explore opportunities to strengthen our economic and trade relationship through an Australia-EU FTA. Comprising the Czech Republic, Hungary, Poland and Slovakia, the V4 has a combined GDP of more than $1 trillion, steady economic growth and a pro-trade outlook similar to Australia’s.
In Paris I will meet Members of the French National Assembly and French business leaders to advocate for an Australia-EU FTA.
The EU, as a bloc, is one of Australia’s most important trading partners with total two-way trade in goods and services worth $99.5 billion. The EU is also Australia’s largest sources of foreign investment, with a total stock worth more than a trillion dollars in 2016.
An Australia-EU FTA will create new opportunities for Australian businesses; driving exports, economic growth and job creation. Launching negotiations will also send an important message to the world at a time of rising protectionism.
In Davos, I will meet EU Trade Commissioner Cecilia Malmström at the World Economic Forum (WEF) to progress the Australia-EU FTA. I will also meet my counterparts and join them for a meeting of World Trade Organization (WTO) Ministers in which I will advance the Australian-led e-commerce initiative.
The WEF presents a significant opportunity to promote Australia as an attractive investment destination. I will meet global business leaders to highlight the investment opportunities Australia offers, particularly in tourism, infrastructure and advanced manufacturing.
I am also visiting the United Arab Emirates to drive investment into Australia and explore new trade opportunities, particularly in agriculture and education. The UAE is our largest trade and investment partner in the Middle East with two-way trade in goods and services between Australia and the UAE valued at approximately $8 billion.
23 November 2017
Media Release from The Hon Julie Bishop MP, Minister for Foreign Affairs
The 2017 Foreign Policy White Paper is the first comprehensive review of Australia’s international engagement for 14 years.
It delivers a framework to ensure our prosperity and security by guiding our international efforts over the next decade and beyond.
Opportunities for Australia in our region and across the world are immense if we continue to engage proactively with the rising economies of the Indo-Pacific. This will allow Australia to become even more competitive, create and support more and better paying jobs, remain an attractive destination for foreign investment and maintain our reputation as a reliable trading partner offering high quality goods and services.
We are also in an increasingly uncertain and contested time for the region and globally, with rising protectionist sentiment and challenges to the international rules-based order.
The White Paper will help us shape the external environment in a way that advances Australia’s interests and values, protects the independence of how we make decisions and preserves the strength and integrity of our institutions.
The White Paper’s fundamental objectives are to:
- Work to keep our Indo-Pacific region secure, open and prosperous;
- Maximise opportunities for Australian businesses and workers by fighting protectionism, and implementing policies that help Australians take advantage of the benefits of an open, competitive economy;
- Ensure Australians remain safe, secure and free in the face of threats like terrorism;
- Promote a world with fair rules and strong cooperation to ensure the rights of all states are respected; and
- Increase support for a more stable and prosperous Pacific.
To achieve these objectives, the Government will:
- Increase our efforts to ensure we remain a leading partner for Southeast Asia, including through an ASEAN-Australia Special Summit in 2018, an increase in our investments in regional maritime security capacity-building, and stronger bilateral ties (for example, our new strategic partnership with Vietnam);
- Extend our ‘step up’ in the Pacific on economic and security issues, including by establishing with our Pacific partners a new Australian Pacific Security College to deliver security and law enforcement training at the leadership level;
- Establish a new civilian deployment programme, Australia Assists, which will deploy over 100 humanitarian specialists each year to countries and communities affected by disasters;
- Extend our network of FTAs to cover more partners, including to ensure that by 2020 we have FTAs with countries that account for 80 per cent of our trade (currently 64 per cent);
- Implement a non-tariff measures strategy to better identify these barriers to trade for Australian businesses and respond to them;
- Develop a stronger “nation brand” to market our commercial, educational and cultural credentials in a competitive global market.
Australia has considerable national strengths. We have a flexible, competitive and growing economy, formidable defence and national security capabilities, including cyber, a cohesive and resilient society built on our values of freedom, equality and the rule of law. We are a regional power with global influence.
With this White Paper, the Government will build on these strengths to pursue our objectives with confidence, ambition and purpose for the benefit of all Australians.
6 November 2017
The high-level Asia-Pacific Regional Conference held in Perth 3-5 November, ended with the Australian and Singapore Foreign Ministers calling for the European Union to take a larger role in the region.
Australia’s Foreign Minister Julie Bishop told the hundreds of delegates who attended the event from throughout Asia and Europe the EU should “undoubtedly” be more engaged in the region.
“I believe that likeminded nations should be working more closely together than ever before,” Ms Bishop said.
“The United States, the EU, Japan, South Korea, India, Singapore need to defend and uphold the international rules-based order which is not on life support.”
FM Bishop underlined her point by declaring the rules-based order was “all we have!”
Singapore’s Minister for Foreign Affairs, Vivian Balakrishnan, was also clear in his support for the EU in the Asia-Pacific.
“The EU needs to be more integrated,” he said after being asked about the EU’s presence in the region.
“More engaged. More invested in this part of the World.”
He added, Singapore “welcomed the EU’s participation” in the Asia-Pacific.
Earlier in the discussion, the Singapore Foreign Minister said the “key brilliance of Europe was the EU” when discussing international security. He also said he “believes in the EU” and that the EU had “made war impossible” on the continent.
The Singaporean and Australian Foreign Ministers were participating in a panel discussion titled “Geopolitics in the Asia-Pacific Region – Opportunities, Challenges and Perspectives” as part of the Asia-Pacific Regional Conference held in the Western Australian capital of Perth from Friday 3 November until Sunday 5 November. The conference drew an impressive audience largely focused on Australian and German relations that included German President Frank-Walter Steinmeier and Australian Prime Minister Malcolm Turnbull.
However, the EU figured prominently in discussions.
PM Turnbull said in his keynote opening address the EU and Australia were key partners in “reinforcing the rules-based economic system”.
He also addressed the topic of trade. He urged the Australians in the audience to “seize the opportunity” to secure a free trade deal with the EU. He also lamented the fact the EU was the only major trading partner that Australia was yet to strike a free trade deal with.
The man who was praised for playing a leading role in organizing the conference, Finance Minister Matthias Cormann, said leaders in the EU and Australia had “absolute focus and commitment” to complete an FTA by the end of 2019.
Another prominent business figure, the Chair of the European Australian Business Council, Nick Greiner, said an FTA was “the final missing piece of architecture between the EU and Australia” and he urged everyone in the room to follow PM Turnbull’s advice to “seize” the opportunity to strike a deal.
Australia’s Shadow Opposition Foreign Minister, Senator Penny Wong, said the Labor Party supported EU-Australia FTA negotiations and was hoping for a “very high-quality agreement”.
The EU’s Ambassador to Australia, Michael Pulch, also participated in the event and said the EU was looking to fast track a “gold standard” FTA with Australia. He explained the European Parliament recently passed a resolution supporting the draft mandate for the EU-Australia FTA.
Dr Pulch stressed the need to engage more with communities to explain the benefits of trade and that the EU had published the draft mandate to allay community concerns. He said the EU would also set up an advisory group to counter trade fears. He also pushed for a survey to gauge the benefits of free trade for European and Australian small to medium businesses.
The EU is in the process of getting a mandate from Member States before possibly launching FTA negotiations early next year.
8 August 2017
The High Representative of the European Union for Foreign Affairs and Security Policy/Vice-President of the European Commission, Federica Mogherini, and Australian Minister for Foreign Affairs, Julie Bishop, signed the EU-Australia Framework Agreement on 7 August in Manila, the Philippines.
The signing of the Framework Agreement marks the beginning of a new era of strategic cooperation between the European Union and Australia.
The Agreement will enable the European Union and Australia to tackle challenges in foreign and security policy, sustainable development, climate change, and economic and trade matters. It will encourage closer links between leaders across government, business and civil society.
High Representative/Vice-President Federica Mogherini said: “Europe and Australia are geographically very far apart, but we work together on a daily basis on the global stage, as like-minded partners and friends. Ours is a partnership of opportunities: bringing our populations closer together to facilitate exchanges, trade, and sharing knowledge. The agreement we have signed today reflects how strong our ties are already and how they will become stronger through our increased exchanges and cooperation, for the sake of our peoples and of the world.”
Foreign Minister Julie Bishop said, “Australia and the EU are natural partners. We share common values and cultural heritage, and are committed to free and open markets. The Framework Agreement builds on our already close ties and aspirations for deeper cooperation and will strengthen Australia’s bilateral relationship with the EU, in an era of unprecedented global development and volatility.”
The Agreement will guide future engagement between the European Union and Australia and complement work towards launching negotiations for a comprehensive and high quality free trade agreement.
Further information on the EU Australia relationship can be found in this factsheet.
11 May 2017
Foreign Minister Julie Bishop expects free trade negotiations with the European Union to kick off in the near future.
The scope of a future trade pact was agreed on in April but now the EU’s remaining 27 member countries, without the exiting Britian, must give approval to fire the starter’s gun on talks.
“The strength of the Australia-EU relationship is such that we are now anticipating entering formal negotiations for a free trade agreement,” Foreign Minister Julie Bishop told a reception to mark Europe Day, at the Department of Foreign Affairs and Trade in Canberra on Wednesday night.
A trade deal would build on a framework agreement which Ms Bishop will sign later this year with her counterpart Federica Mogherini, she said.
“In an era where economic nationalism and forms of protectionism are seeping into national debates and narratives, it’s important we remind our citizens of the benefits of globalisation,” Ms Bishop said.
The EU is Australia’s second largest trading partner and largest source of foreign investment.
In 2015-16, two-way trade was worth $95.6 billion and total investment stock from the EU was almost $1 trillion.
Both sides have quietly breathed a sigh of relief after centralist Emmanuel Macron was elected French President this week over far right nationalist Marine Le Pen who had a protectionist platform.
EU Ambassador to Australia Sem Fabrizi reflected on the EU’s 60 year history and said that it has not all been plain sailing with the “recent outbreak of populism and nationalism” which created challenges.
He said Australia and the EU will reach an “emerald” 55th anniversary of diplomatic relations this year.
“We are a good, wise, strong couple,” he said.
AAP understands trade negotiations could start by the end of the year depending on whether there are any road blocks from European Parliaments.
The EU’s trade deal with Canada was briefly held up last year when a Belgian regional parliament initially refused to sign off.
5 May 2015
The EU Delegation to Australia, together with the European Investment Bank regional office for the Pacific based in Sydney, the Europe Australian Business Council and the NSW European Union Parliamentary friendship group gather in Sydney on 8 May to mark the 60th Anniversary of the Treaty of Rome while the Sydney Opera House is lit EU Blue.
Europe will take centre stage in Sydney tonight with the sails of the Sydney Opera House lit in blue to mark Europe Day.
Europe Day celebrates French Foreign Minister Robert Schuman’s declaration in 1950 to his fellow European partners, proposing to pool sovereignty in the coal and steel industries. This laid the foundations for the creation of the European Union project. It also set Europe up for its longest period of peace in its history and created the world’s largest economic bloc with more than half a billion citizens.
The European Union’s Ambassador to Australia, Sem Fabrizi, said the day would also be devoted to marking the 60th anniversary of the Treaty of Rome, the founding document of what is today the European Union.
“After two devastating World Wars the Schumann declaration was a visionary idea to cooperate through sharing and pooling sovereignty. This laid the foundations for a long lasting reconciliation of Europe,” Ambassador Fabrizi said. “The Treaty of Rome made it a reality applying this idea to the greater set of common policies.”
“It is fitting we light the sails of the Opera House to not only celebrate Europe Day but also the Treaty of Rome. This brought together a group of six nations that has since grown to 28. It set in motion the process of abolishing internal borders, the creation of the common currency, the euro, and the reunification of a divided continent after the fall of the Berlin wall.”
Europe Day and the Treaty of Rome will also be celebrated by other members of the European community at a function in Sydney tonight. These include the European Australian Business Council (EABC), the European Investment Bank (EIB) and the New South Wales European Union Parliamentary friendship group.
The Head of the regional office of the European Investment Banik in Sydney, Adam Bruun, said the Schumann declaration and Treaty of Rome had begun the process for the EU to become the world’s largest development donor.
“Not only was the integration process an imperative factor in the development of EU economies, but the EU vision of free markets and international prosperity has been providing great assistance to developing economies world-wide,” Mr Bruun said.
The Hon Nick Greiner AC, Chairman of the European Australian Business Council (EABC), stated that this 60th anniversary of the Treaty of Rome would provide a time to reflect on EU successes, but also the work to be done to secure enhanced co-operation with strategic partners such as Australia, including the launch of negotiations this year for an Australia-EU Free Trade Agreement.
“Europe’s single market of 500 million consumers presents enormous opportunities for Australian companies to export high-quality goods and services abroad, whilst Australia’s economic growth and integration with Asia, the fastest growing region in the world, makes it an obvious partner for Europe” Mr Greiner said. “Given the momentum behind forces seeking to wind back the clock on global trade, an accelerated and ambitious FTA would be a powerful expression of commitment to open trade and the overwhelmingly positive benefits which will undeniably flow.”
The Sydney Opera House will be lit in the EU’s famous blue colours from sunset until 1am tomorrow morning.
7 April 2017
Australia and the European Union (EU) have successfully concluded a joint scoping exercise on a future free trade agreement (FTA) between the two economies.
This is a key step toward the launch of negotiations. Both sides will now work through their domestic processes to secure approval of a negotiating mandate.
An Australia-EU FTA has the potential to drive economic growth by opening up new export opportunities, enhancing investment flows, and removing trade barriers for businesses.
Collectively the EU is Australia’s second-largest trading partner and largest source of foreign investment. In 2015-16, two-way trade was worth $95.6 billion and total investment stock from the EU was almost $1 trillion. Our trade with the EU accounts for about 15 per cent of our global trade.
Australia and the EU have concluded the FTA scoping phase in less than 18 months. This initiative is an important element of the Turnbull Government’s ambitious trade agenda. We’re pursuing an ambitious trade agenda and creating new export opportunities for Australian businesses because more exports means more jobs.
Together with the EU, the Government is confident our two open, liberal economies can agree to strengthen our economic relationship to the mutual benefit of our businesses and local communities.
Australia is a step closer to a free trade deal with the European Union, after finally reaching agreement on what such a deal might cover on Thursday.
The so-called “scoping study”, a prelude to formal negotiations, has been delayed several times after it was initially expected late last year.
The hold-up was put down to internal debate within the EU, where such deals have recently met stiffer resistance.
On Thursday afternoon, Australian time, the EU Commissioner for Trade Cecilia Malmstrom and Australia’s Trade Minister Steven Ciobo spoke on the phone and formally agreed on the scope and ambition of a future FTA.
After the call Ms Malmstrom tweeted she was “looking forward to receiving a mandate from MS [Europe’s member states] so that we can start negotiating soon with this very important friend and partner”.
Mr Ciobo said the scoping exercise, which had taken less than 18 months, was a “key step” towards the launch of negotiations.
“An Australia-EU FTA has the potential to drive economic growth by opening up new export opportunities, enhancing investment flows, and removing trade barriers for businesses,” he said.
“This initiative is an important element of the Turnbull Government’s ambitious trade agenda.”
Australia’s ambassador to the EU, Mark Higgie, called the development “an important step”.
The EU Commission will now ask member states for the authority to launch formal negotiations, and for specific negotiating directives.
The EU (including the UK) is Australia’s third-largest trading partner, with more than $60 billion in bilateral trade. It is Australia’s biggest two-way trade in services partner, and biggest source of service imports.
However two-fifths of that services trade is with the UK, which will likely be out of the EU before the free trade deal comes into effect.
The EU minus the UK is second to the US in total services trade, second in imports and third in exports.
EU exports to Australia include mostly vehicles and machinery but it also registers a trade surplus in the agri-food sector. EU companies supply commercial services worth nearly $28 billion to Australia and hold investment in the country worth more than $200 billion.