EU trade talks closing on success

There are indications of a major breakthrough following talks between Trade Minister Don Farrell and his EU counterpart.

Trade Minister Don Farrell. Picture: AFP

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Australia and the European Union have made “significant progress” on a long-awaited free-trade deal, with indications a major breakthrough has been achieved following talks between Trade Minister Don Farrell and his EU counterpart in Paris this week.

For more than seven years, the two sides have been unable to land an agreement, with talks having fallen apart in 2023 when ­Australia rejected the EU’s latest proposal.

But according to a government source, the two parties this week made headway towards reaching a deal. “Limited outstanding issues remain, and officials are actively working to resolve them, with the aim of reaching an agreement that delivers for both sides as soon as possible,” the source said.

The comments followed the meeting between Senator Farrell and European Trade Commissioner Maros Sefcovic on the sidelines of the OECD Ministerial Council Meeting in France.

“Significant progress has already been made toward bridging differences,” the source said.

Major sticking points during past negotiations have included: concerns from the EU’s agricultural sector over Australian ­farmers getting better access to the EU market, rather than being hit with strict tariffs and quotas; and the EU’s original demand for Australia to stop using product names such as prosecco and feta.

The EU has softened its requests on Australia when it comes to these “geographical indicators” following the election of Donald Trump and the disruptive trade tariffs enforced by the US President on countries across the globe.

Senator Farrell said Australia and the EU had come to the understanding that the time was right to prioritise striking a deal.

“Both Australia and the EU recognise that now is the time to strengthen our economic partnership, and we’re working through the remaining issues to try and finalise the deal,” Senator Farrell said. “This is a once-in-a-­generation opportunity to secure access to the world’s largest single market and deepen ties with a vital economic partner.”

The EU is made up of 27 member states, making it challenging to land a deal that satisfies varying interests. But Senator Farrell said there was a mutual desire to bolster all countries’ “economic resilience”, which an FTA would do.

“A trade agreement with the EU isn’t just about boosting exports; it’s about building economic resilience in a rapidly changing global environment,” he said.

“A trade deal with the EU would deliver benefits across every sector of the Australian economy. It would drive investment, strengthen supply chains, boost innovation, deepen education ties, lower costs for Australian consumers and business, and create a wealth of export opportunities.”

Progress on the FTA follows the EU striking economic deals with partners such as India and the UK in recent weeks and comes as Mr Trump pursued deeper tariffs on goods like steel and aluminium.

Labor is under substantial pressure from industry and the Coalition to land an exemption to the hike in tariffs, as the UK has done, but is seeking to stand firm at the same time against calls from the US for Canberra to raise defence spending to 3.5 per cent.

Ahead of a formal FTA between the EU and Australia, ­European Commission president Ursula von der Leyen this week ­revealed she would be visiting Australia in coming months.