Australia-EU trade talks back on amid scramble over Trump tariffs

Salzburg: Australian trade officials will be dispatched to Brussels within days to revive stalled free trade negotiations with the European Union, as escalating global trade tensions – sparked by Donald Trump’s return to economic nationalism – inject fresh urgency into finalising the long-delayed pact.

Trade Minister Don Farrell confirmed the breakthrough following an hour-long meeting in Paris on Wednesday with EU Trade Commissioner Maros Sefcovic, where both sides agreed to restart formal discussions.

“This is a critical time for stable, rules-based trade”: Don Farrell.Credit: Alex Ellinghausen

“We’ve both agreed now that we’re going to restart negotiations,” Farrell told this masthead. “That’ll be kicked off in the next day or two, when we send our officials to Brussels [to] see if we can scope out what are the outstanding issues.”

The renewed momentum comes as Trump’s steep tariff hikes on imports to the US trigger a global scramble among its allies to lock in new or more resilient trade partnerships. The US president has doubled tariffs on steel and aluminium from 25 to 50 per cent, while slapping a blanket 10 per cent tariff on all other imports from Australia.

Farrell, who is attending the OECD Ministerial Council Meeting, also met with US Trade Representative Jamieson Greer on the sidelines in Paris to express Australia’s “firm objections” to the new tariffs.

“We’ve made clear our position to the United States,” he said. “This is a critical time for stable, rules-based trade.”

Prime Minister Anthony Albanese is also set to raise concerns about the tariffs directly with Trump when the two leaders meet for the first time on the sidelines of the G7 summit in Canada in about 10 days.

The EU-Australia agreement has been stalled since late 2023, largely due to deadlock over agricultural market access, particularly Australian beef and lamb exports.

Farrell said the issue remained a sticking point after his discussions with Sefcovic.

“They reiterated the difficulties that they have with their farmers,” Farrell said. “I don’t think they were sort of indicating necessarily any movement. But the good thing is that we’re talking again – [there’s a] genuine willingness to discuss openly.”

A European Commission spokesperson said the pair had a “productive” discussion and “took stock” of trade negotiations. “Technical teams will now compare notes on outstanding issues,” they said.

Canberra wants the EU to provide “meaningful quotas” for agricultural exports, and is seeking to resume talks from the point at which they broke down.

“From our point of view, [we’d] be starting from where we finished,” Farrell said, while noting “that may not be their interpretation.”

Australia’s farming organisation say there cannot be a deal unless it delivers improved market access, with levels above past quotas being sought for Australian beef, lamb, sugar, cheese and rice.

In exchange, Brussels continues to push Australia to accept protections for geographic indications – product names such as feta, parmesan and prosecco.

The Financial Review revealed this week that European Commission President Ursula von der Leyen is expected to visit to Australia by August, in anticipation of being able to sign the EU-Australia free trade agreement if negotiations succeed in the coming weeks.

“We made progress in the last set of negotiations,” Farrell said of the talks that formally began in 2018. “But the issues that are outstanding are the difficult ones. If this was easy, somebody else would have done it.”

Europe continues to push Australia to accept protections for geographic indications for product names such as parmesan.Credit: Joe Armao

Farrell also confirmed direct engagement with EU member states seen as key holdouts, including France and Ireland. “We’re meeting the French tomorrow,” he said. “I had again a brief chat with the Irish yesterday.”

He stressed that securing a final deal will also require “top-level political discussion,” including further involvement from Albanese. “That’ll also be important,” he said.

Beyond agriculture, critical minerals and clean energy, supply chains are shaping up as shared strategic interests.

“They acknowledged that we are a reliable source of critical minerals,” Farrell said. “We’ve got the supply chains in place. We’ve got the technology to extract … we are alternatives to any other country that might be wanting to get into this space.”

The federal government has made finalising the EU trade deal a centrepiece of its economic diplomacy, alongside other agreements with the United Arab Emirates and India.

As global trade enters a more fractured, protectionist phase under Trump’s second term, Farrell said the EU pact would “demonstrate that it is still possible to reach free trade agreements, even in an environment with increasing protectionism.”

“We are fair dinkum about free trade agreements,” Farrell said. “We are capable of negotiating them and getting fair outcomes. And that’s what we want to do.”

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