EU-Australia Free Trade Agreement

Negotiations for an EU-Australia FTA began in July 2018, were delayed at the end of 2021 by diplomatic tensions over the Australian cancellation of the French submarine contract, but are now  resumed and will continue into 2023  .

Australia is seeking greater market access for its agricultural goods and for manufacturing and services exports. The danger is that it will trade off other important policies in return for these. See AFTINET’s 2018 submission here.

The EU wants protection for its Geographical Indications for agricultural products (that only EU products can be called Prosecco, Feta cheese etc). It has demanded this as a condition for reduced tariffs and quotas for Australian agricultural exports. Australian farmers and food industries are saying no to this, but want more access to the EU for their exports. DFAT called for submissions on the EU list of over 400 products and submission closed on November 13, 2019.

The good news is that European Court of Justice decisions on ISDS mean ISDS will not be included on the agreement. Like all other trade agreements, there will be state-to-state disputes processes to enforce most chapters in the agreement. But the EU is still pursing separately its proposal for a Multilateral Investment Court in the UNCITRAL forum debating possible changes to ISDS and may seek a separate investment agreement in the future.

The EU also has a more transparent trade policy than Australia, is publishing its draft texts, and will publish the final text before it is signed.

Despite a more transparent process, the EU trade agenda is still dominated by corporate interests and there are still key issues of concern in the proposed agreement:

• EU global Pharmaceutical companies are pushing for longer data protection monopolies on  medicines  to match the EU standard of 8-10 years (Australia has five years). this is in addition to the 20-year patent monopolies on all new medicines. this would delay access to cheaper medicines and cost Australian taxpayers hundreds of millions of dollars per year.

• Restricting regulation of essential services The trade in services chapter is likely to be modelled on the controversial Trans-Pacific Partnership Agreement  and services chapters in other EU agreements which open most services to foreign investment and restrict new government regulation of services. For example, it could prevent regulation of energy services in response to climate change or prevent improvements in staffing levels in aged care or childcare. It could also stop governments from regulating to fix privatisation failures, as have occurred in vocational education services and privatised hospitals.
• E-Commerce rules to suit the needs of global digital companies and restrict governments from regulating them. These rules deregulate cross-border data flows, prohibit regulation to ensure local data storage and local presence and prohibit regulation of algorithms and source code. The EU model of regulation has some privacy protections, but in the wake of tax evasion by digital companies, data abuse scandals, the development of gig economy jobs without labour rights, artificial intelligence and facial recognition technology we need stronger privacy and other protections for consumers and workers. 

• The EU wants greater market access for its global firms to Australian government procurement by removing local preference provisions for Australian local small and medium-sized enterprises (SMEs). and Indigenous enterprises and including local government procurement. This would be incompatible with Labor government plans to use government procurement as part of local  industry development  for renewable energy and other industries.  
• Enforceable labour rights and environmental standards. EU agreements have clauses on labour rights, environmental standards, gender equality, animal protection and other social clauses, but they are not fully enforceable through government-to-government disputes in the same way as other chapters in the agreement. the EU is also demanding that Australia make a clear commitment to net zero emissions by 2050, which the Labor Government has now legislated.

The challenge will be to ensure that these commitments are genuinely enforceable.

The UK was part of these negotiations until It formally left the EU on January 31, 2020.

Negotiations for a separate FTA with the UK began in June 2020 and were completed in 2022. See http://aftinet.org.au/cms/UK-FTA 

Updated December  2022..