Australia and the European Union (EU) have resumed free trade talks in the Australian capital, Canberra.
Negotiations over an trade agreement between Australia and the European Union began in 2017.
Progress has not always been easy. There was dismay over Australia’s shelving of a lucrative submarine deal with France in favor of the AUKUS alliance with the United States and Britain. That anger has subsided. There were, though, also concerns in Europe about Australia’s environmental targets under the previous conservative Canberra government, which was a strong supporter of the fossil fuel industry.
However, the recently elected Labor government plans to cut emissions by 43% by 2030. It is the first time environmental targets have been legislated in Australia and the new policy has kick-started trade discussions with Europe. The EU sent a senior delegation to Canberra this week, and there are hopes a free trade agreement can be signed by the end of 2023.
The European Union is eager to harness Australian green hydrogen and other critical minerals, such as lithium, used in renewable power. Russia’s invasion of Ukraine, and the subsequent impact on energy supplies, have intensified the EU’s search for reliable suppliers of the minerals needed for energy and digital enterprises.
Bernd Lange, the chair of the European Parliament's committee on International Trade, believes Australia can play a big part in industrial decarbonization.
“We are going away from fossil fuels and Australia has a big volume of possible green hydrogen, of lithium, of copper and we want to get it in a sustainable way for the transformation of industry in Europe but also in Australia,” he said.
Australian negotiators want greater access for key farming exports, including beef, dairy, sugar and grain. However, analysts say that agriculture is a sensitive issue, with some members of the European Union wanting to restrict imports to protect local producers.
As a bloc, the EU is Australia’s second largest two-way trading partner of goods and services. The European Union is an economic and political union of 27 countries.
Officials have said “Australia's position in the world as a global top 20 trading nation is underpinned by our advocacy for an open global economy.”
The Canberra government has signed more than a dozen free trade pacts with various countries and groupings, including Japan, the United States and China, its biggest trading partner.
Its first free trade agreement was signed with New Zealand in 1983.