E.U., Australia one step closer to launching FTA

12.04.2017

The E.U. and Australia recently completed an 18-month free trade agreement (FTA) joint scoping exercise. The preliminary discussions aimed to define areas to be covered as well as the level of ambition for a future agreement between the two economies.

The study takes into account the agreed scope, new opportunities the agreement could create for E.U. businesses, as well as sensitivities in the farming sector.

“This is a key step toward the launch of negotiations,” said Steven Ciobo, Australia’s minister for trade, tourism and investment. “Both sides will now work through their domestic processes to secure approval of a negotiating mandate.”

The prospect of an E.U.-Australia free trade agreement is part of policy orientations set out in the E.U. "Trade for All" strategy paper of 2015, backed by all E.U. Member States.

The E.U. and Australia already cooperate closely on trade policy issues, including in the multilateral area.

According to the European Commission, the E.U. is Australia's third-largest trading partner. Annual bilateral trade amounts to more than €45.5 billion, with a positive trade balance of more than €19 billion on the E.U. side. E.U. exports to Australia include mostly vehicles and machinery but it also registers a trade surplus as far as the agri-food sector is concerned.

GrainGrowers, an independent and technically resourced grain farmer representative organization with 17,500 members across Australia, supports the FTA negotiations. Its general manager of policy and innovation, David McKeon, said that while the E.U. was a significant grain producer in its own right, particularly of wheat and barley, it provided an important market for Australian oilseeds.

“It is a particularly important market for Australian canola, accounting for an average of 57% of our canola exports markets in the five years to June 2015, and worth $900 million a year,” he said. “Australia is second only to Canada, and marginally ahead of the Ukraine, as the largest canola exporter in the world, at 2.5 million tonnes per year.”

McKeon said that while wheat and barley remain dominant on the landscape of Australian grains industry production, canola planting is likely to increase this year due to depressed international prices for wheat-making progress on the E.U. trade agreement even more important.

“We support actions to liberalize trade by the removal of trade distortions, including tariffs, quotas and other technical market access barriers,” he said. “While we will be working with the government to improve access for grain and oilseeds into the E.U. market, it is important to note that current rates of domestic support for agricultural production in the E.U. remain an ongoing challenge in leveling the playing field.


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