The European Union is seeking to conclude a free-trade agreement with Australia by the summer, even as the two sides still need to work through some of the more contentious issues, according to Bloomberg.
Further discussions are due to take place later this month, which will likely be the last round before chief negotiators tackle any outstanding issues, according to a European Commission spokesperson, who confirmed the timeline.
Issues that still need to be agreed include the geographical indication of food goods such as cheese as well as matters pertaining to data and privacy.
An accord would boost trade between the EU and Australia by liberalizing tariffs on swathes of goods. It would also fit into the bloc’s strategy to increase its geopolitical weight in the Indo-Pacific region and further its aim to diversify the EU’s supply of critical raw materials.
Australia is the EU’s 21st largest trading partner and a major exporter of key commodities needed for Europe’s green economy transition, like lithium and cobalt. The EU and Australia exchanged $17.9 billion in total two-way goods trade in 2022 — a 93% increase from the previous year.
Australia is also a strategically important trade partner due to its participation in both the Chinese-led Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The bilateral relationship has been bumpy in recent years after Canberra signed a security pact with the US and Britain, which included an agreement to purchase nuclear-powered submarines and ditched earlier commitments with France.
Ties were strengthened after Russia’s invasion of Ukraine, with Australia closely aligned to measures introduced by the EU and Group of Seven nations. A new center left government led by Anthony Albanese also eased previous differences over global warming.
The agreement will include a chapter on climate goals and labor standards, with the potential suspension of trade benefits if one of the parties breaches the Paris climate accords or the principles of the International Labour Organization.
Before an agreement is concluded, negotiators will need to focus on several difficult issues, including market access for Australian meat and dairy products or the protection of some European cheese and wines, according to people familiar with the discussions. Further progress on public procurement is also needed before sealing a deal.
Any agreement, once finalized, would need the backing of member states and the European Parliament.