‘Incredible boost’: Europe touts prospect of breakthrough on elusive trade pact

European investment in Australia would almost double under a breakthrough free trade pact that the European Union’s top representative here says could be struck by the year’s end.

EU ambassador to Australia Gabriele Visentin signalled that Europe was open to compromise on the use of names such as prosecco and feta by Australian producers, a key sticking point in previous negotiations, which began in 2018 and collapsed two years ago.

Reviving the stalled free trade negotiations will top the agenda when Prime Minister Anthony Albanese meets European Commission President Ursula von der Leyen in Rome on Sunday after Pope Leo XIV’s inaugural Mass.

US President Donald Trump’s volatile tariff policies have sparked renewed interest in securing a free trade pact between Australia and the European Union, a bloc of 445 million people that stands out as one of the few markets with which Australia does not have a free trade deal at present.

EU ambassador to Australia Gabriele Visentin says he is hopeful the bloc can strike a free trade deal with Australia. Credit:

“The right answer to the current disruption, the turmoil in the world, is precisely more free trade based on the rule of law,” Visentin said in an interview at the EU’s Canberra headquarters.

“I think there is a clear willingness of the two sides to sit at the table and resume the negotiation.”

Visentin revealed that economic modelling commissioned by the EU had found European exports to Australia would increase by 33 per cent under a free trade deal, with European investment soaring by an estimated 87 per cent.

“A free trade deal would lead to the removal of tariffs from day one, and that would be an incredible boost to our economic relations,” Visentin said.

Asked if a deal could be reached by year’s end, Visentin said: “Yes, when there is political will, then these things can happen.”

He said he was hopeful Albanese and von der Leyen’s meeting in Rome would be quickly followed by high-level visits to Australia by top officials, including European trade commissioner Maros Sefcovic.

Bilateral trade between Australia and the EU is worth $156 billion a year, a figure that would surge if a free trade agreement were struck.

European negotiators had previously adopted a hardline approach, including demands that Australian producers stop using traditional names such as parmesan, feta and prosecco. Those efforts were fiercely resisted by Australian exporters.

Visentin expressed hope the two sides could reach agreement on these so-called “geographical indicators”.

“I can tell you the European Union has a history of sorting out this kind of issue with our partners; there is a history of possible compromises which were acceptable to our partners as well,” said the Italian native, who previously served as the EU’s first special envoy for the Indo-Pacific.

Mauro Montalto from Floridia Cheese is the third generation to produce traditional Italian cheeses, including parmesan, after his grandfather emigrated from Italy in the 1950s. But his ability to use the name parmesan is under threat as Australia and the EU continue free trade negotiations.Credit: Joe Armao

“And I am pretty confident that what happened in the past would be an inspiration for the negotiations with Australia.”

He added that a compromise could also protect Australian products such as Tasmanian whiskey and Manuka honey.

However, the biggest point of contention will probably be expanded access to the European market for Australian beef, lamb, sugar and cheese.

The EU imposes strict quotas and high tariffs on Australian agricultural imports, which negotiators have been trying to remove or at least significantly reduce.

European farmers have recently organised a wave of heated protests against cheap imports, including Czech farmers dumping manure in front of the government’s office and French farmers driving tractors through Paris, underlining the political sensitivity of the issue.

French farmers protest in central Paris against falling prices for their products.Credit: Bloomberg

“I won’t say that it will be an easy negotiation at all,” Visentin said.

“We still have some differences which will have to be resolved and compromises drawn from both sides, but what has changed is really the sense of willingness to reach an agreement.”

The National Farmers’ Federation supported the government’s decision to walk away from negotiations in 2023, blasting the European offer as “a dud deal” that would not meaningfully increase Australian agricultural exports.

The federation has welcomed the resumption of free trade talks while stressing that “recent trade disruptions should not lower the bar of expectations for any deal with the EU”.

Trade Minister Don Farrell has indicated the government is willing to drop its luxury car tax, which affects European brands such as Mercedes-Benz and BMW, to help secure a trade deal.

Visentin argued that a free trade deal between Australia and the EU would be enhanced by shared values of democracy, freedom of speech and the rule of law.

“Your first trading partner, our first trading partner, is very important, but we don’t share values,” he said, in an unspoken but unmistakable reference to China.

“Our shared values make our economic relations stronger and more long-lasting because if you don’t share values, then you can go into economic coercion without being accountable to any kind of opposition or rule of law.”