Australia and EU talks break down as minister slams offer as not good enough

Australian Trade Minister Don Farrell has slammed the European Union’s trade deal offer as “not good enough” and left the negotiating table for the second time in four months.

The breakdown of talks in Osaka, Japan, has cast doubt on the future of this long-anticipated trade agreement.

A team of around 10 EU negotiators, along with top Commissioners Valdis Dombrovskis and Janusz Wojciechowski, had worked for five years to finalise this deal.

However, Farrell’s abrupt departure frustrated EU negotiators, who travelled to Japan with high hopes of sealing the deal.

This incident sheds light on the challenges the EU faces when diversifying its trade partners away from China. It also shows that like-minded countries like Australia may have different priorities.

READ MORE: ‘Bombastic’ EU to blame for Australia trade deal collapse – plays into UK hands

Australia was determined to secure a better deal for its significant farming sector, challenging the EU’s offer to New Zealand.

The upcoming visit of Prime Minister Anthony Albanese to China, the first by an Australian leader since 2016, is another factor that overshadows the importance of this EU trade agreement, given that China represents a substantial 27 per cent of Australia’s bilateral trade, far more significant than the EU.

Expectations were high for a deal in Osaka, especially after promising expert-level talks. Still, EU Trade Chief Valdis Dombrovskis expressed disappointment as Australian negotiators failed to engage based on previously agreed terms.

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With both the EU and Australian elections approaching, trade negotiations are expected to become more complex, with politicians focusing on campaigning. Despite this setback, the European Commission has expressed a willingness to continue negotiations, hoping for an agreement by year-end.

The negotiations took a hit when Minister Farrell met with Commissioner Dombrovskis in Osaka. Brussels believed they had made a reasonable offer by granting over A$1 billion in new market access. However, Farrell reintroduced demands from the Australian farm lobby, which was present at the meeting, breaching previous commitments.

As elections loom, both sides are likely to stand firm on farm market access, a sensitive issue for Australia’s influential agricultural lobby and EU countries with significant farm sectors, such as France, Ireland, and Poland. The EU is keen on protecting its meat and sugar sectors, aligning with the interests of European farming groups.

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