Farm groups, including the Australian Dairy Industry Council (ADIC), have applauded trade minister Don Farrell for turning down the European Union’s ‘unacceptable offer’ for a free trade agreement.
Farrell, who is leading the negotiations for Australia, met with his EU counterparts at a G7 meeting in Osaka, Japan, in a bid to iron out outstanding issues, such as import quotas for Australian agricultural products and EU demands for protections of products with geographical indication status.
But negotiations broke down after Farrell stood firm on his word that he would not sign a deal “for the sake of it”.
“I came to Osaka with the intention to finalise a free trade agreement with the European Union. Unfortunately, we have not been able to make progress,” Farrell said in a statement.
“Since I became trade minister, I have been to Europe three times to progress a deal that benefits Australia’s national interest. My job…is to get the best deal that we can for our producers, our businesses, our workers, and our consumers.
“Negotiations will continue, and I am hopeful that one day we will sign a deal that benefits both Australia and our European friends.”
The sticking points
Import quotas remain a key sticking point for Australia, while the EU has been frustrated with Australia’s refusal to commit to protecting products from the EU’s geographical indication (GI) scheme. The GI scheme contains hundreds of food and drink products, such as cheeses feta or comté, and exists to protect the names of products that originate from specific regions and have specific qualities. The EU doesn’t demand all camembert or brie products to be protected, but for example Brie de Meaux or Camembert de Normandie would require such legal protections.
Meanwhile, Australian farm groups have demanded better market access terms for their products. According to ADIC, 70,000 tonnes of European dairy products are imported to Australia annually compared to just 500 tonnes of Australian exports to the EU. By and large, Australia is only the 18th biggest partner for trade in goods for the EU, while for Australia, the EU is its third largest partner, only behind China and Japan.
Red meat and sugar exports have remained big sticking points for Australia. Andrew McDonald, Chair of the Australia-EU Red Meat Market Access Taskforce, said that meat producers’ access to the EU market ‘has actually been eroded while we’ve been negotiating the FTA’. “Australia’s trading relationship with the EU is based on shared values and is heavily focussed on meeting EU customer demand for high quality red meat products,” he said. “However, our ability to service the market is severely limited due to the EU’s maintenance of outdated, inequitable and restrictive quotas and high tariffs.”
In dairy, ADIC chair Rick Gladigau and deputy chair John Williams represented the sector’s interests during the talks in Osaka. Gladigau said: “Despite the best efforts of the Australian Government, the EU has continued to make unreasonable demands by insisting Australia adopt an anti-competitive geographical indications regime while at the same time resisting to provide equitable market access into the EU dairy market.”
Williams said an FTA with the EU offered no gains for Aussie dairy, just costs and burdens. “We thank minister Farrell for not blinking at the eleventh hour and having the fortitude to walk away in the face of the EU maintaining its unreasonable position. This is especially important as the industry battles increasing cost of production, a flood of cheap imports and the lowest milk pool in 30 years.”
