EU talks put trade deal back on track

Australia’s efforts to seal a trade deal with the EU are set to be ­accelerated after Spanish Prime Minister Pedro Sanchez threw his support behind the bid.

Anthony Albanese with Spanish Prime Minister Pedro Sanchez at a meeting ahead of a NATO summit, at La Moncloa Palace in Madrid. Picture: AFP

Australia’s efforts to seal a trade deal with the EU are set to be ­accelerated after Spanish Prime Minister Pedro Sanchez threw his support behind the bid in a meeting with Anthony Albanese.

Australia’s negotiations with the EU had stalled under the former Morrison government amid objections by France and European criticism of the nation’s climate policies.

But Mr Albanese, who met with Mr Sanchez in Madrid ahead of this week’s NATO summit, said his government’s more ambitious climate change policies had removed a key impediment to getting the deal done.

His upcoming relationship reset with French President Emmanuel Macron in Paris later this week, following Australia’s payment of $830m in compensation for cancelling the French-­designed Attack-class submarines, will clear the second major hurdle to the deal.

“The Spanish Prime Minister indicated very much his support for that deal,” Mr Albanese said after their bilateral meeting.

“Going ahead, there will need to be more discussions. And this afternoon, when I have further meetings, including with the Prime Minister of the Netherlands, it will be a common theme that I will take to the bilaterals here in Madrid.”

Mr Albanese said he was hopeful the deal could be significantly advanced by the beginning of the first quarter of 2023.

“So I’m hoping for coming months to really see an acceleration of that process,” he said.

Mr Albanese said the EU trade deal was “critical” to Australia, offering Australia greater access to the $24 trillion European economy and smoothing the way for greater European investment in Australia.

Spain’s trade minister will visit Australia in coming months, along with other EU counterparts to progress the negotiations.

Mr Albanese said Australia “just wasn’t seen as being fair dinkum” on tackling climate change under the former government, “and that was something that was having an impact on our relations with our friends”.

“Europe is considering, for example, penalties on nations that aren’t taking action on climate change, and it was very clear that the changed position of Australia has been noticed and welcomed,” the Prime Minister said.

France had stalled the free-trade talks, which were repeatedly delayed without official explanation, but Mr Albanese and Mr Macron are set to put the Australia-France relationship back on a firm footing on Friday during the Prime Minister’s official visit to the country.

Mr Albanese and Mr Sanchez also discussed the prospect of Australia buying three additional Hobart-class destroyers from Spanish shipbuilder Navantia.

Mr Sanchez raised Navantia’s proposal to build the ships – either in Australia or Spain – for about $2bn each, by 2030.

The offer, if accepted would guard against a capability gap ahead of the arrival of the trouble-plagued $45bn Hunter-class frigates, the first of which isn’t expedited to arrive before 2035, despite growing strategic threats.

Mr Albanese told Mr Sanchez the prospect of acquiring the additional Hobart-class destroyers would be considered in the upcoming defence force posture ­review of the nation’s $270bn ­acquisition pipeline.