EU and Australia on Brink of Historic Free Trade Pact, Boosting Bilateral Trade by Almost 20%

Prime Minister Anthony Albanese's meeting with European Commission President Ursula von der Leyen in Rome is set to revive stalled free trade negotiations between Australia and the EU, which could seal a breakthrough deal by year's end. The pact would nearly double European investment in Australia, with economic modelling predicting a 33% increase in European exports and an 87% surge in investment.

Key Takeaways:

• The EU is willing to compromise on the use of traditional names such as prosecco and feta by Australian producers, a key sticking point in previous negotiations.
• Economic modelling commissioned by the EU found European exports to Australia would increase by 33% under a free trade deal, while European investment would soar by an estimated 87%.
• A free trade deal would lead to the removal of tariffs from day one, providing an "incredible boost" to the economic relations between the two sides.
• EU ambassador to Australia Gabriele Visentin expressed hope that a compromise could be reached on so-called "geographical indicators" such as parmesan, feta, and prosecco.
• Visentin revealed that the European Union has a history of finding compromises on similar issues with partner countries, including Australia.
• A free trade deal between Australia and the EU would remove restrictions on Australian agricultural imports, including beef, lamb, sugar, and cheese.
• European farmers have recently organised heated protests against cheap imports, including Czech farmers dumping manure in front of the government's office and French farmers driving tractors through Paris.
• Trade Minister Don Farrell has indicated the government is willing to drop its luxury car tax to help secure a trade deal.

Statistics:

• Bilateral trade between Australia and the EU is worth $156 billion a year, which would surge if a free trade agreement were struck.
• The EU imposes strict quotas and high tariffs on Australian agricultural imports, which negotiators have been trying to remove or significantly reduce.
• European investment in Australia would almost double under a free trade pact.
• European exports to Australia would increase by 33% under a free trade deal.
• European investment would surge by an estimated 87% under a free trade deal.

Sources:

• European Union ambassador to Australia Gabriele Visentin, interview at the EU's Canberra headquarters
• EU report on economic modelling
• Australian Government statement by Trade Minister Don Farrell
• National Farmers' Federation statement on the EU-Australia trade deal
• European Union press release on the meeting between EU and Australian leaders.