Farrell “disappointed” trade deal collapsed, but EU lost critical minerals “opportunity”

Trade Minister Don Farrell reveals his “bitter disappointment” at the breakdown of free-trade talks with Europe, and what it means for minerals and agriculture.

Trade minister Don Farrell has fired a stunning broadside towards Brussels following last month’s collapsed free trade talks, saying the European Union’s failure to ink a deal meant it had “lost an opportunity to get on the front foot with critical minerals”.

Speaking candidly for the first time since talks broke down in Osaka, Senator Farrell admitted being blindsided when a fresh trade deal was not tabled by European negotiators.

“I had anticipated that we were going to get a revised offer and it simply didn’t come,” he said.

“I was bitterly disappointed that we didn’t nail the deal, I always thought we could get close enough, but we didn’t.”

Moments before the parties were due to begin official talks on October 30, Senator Farrell was told “it might be worth” first speaking with EU executive vice president Valdis Dombrovskis.

Trade Minister Don Farrell (centre) with senior media adviser Grace Finch (right) and chief-of-staff Ben Rillo (left) communicate with Prime Minister Anthony Albanese and Agriculture Minister Murray Watt and other stakeholders immediately following a one-on-one meeting between Senator Farrell and European Union Trade Commissioner Valdis Dombrovskis in Osaka, Japan, on October 30, 2023. Picture: Supplied

That sideline meeting lasted about 90 minutes “while everyone stood around and waited”, and the talks were cancelled when the EU failed to improve the offer Australia rejected in July, with the chasm between agricultural quotas remaining “significant – we weren’t close”.

“They maintain we reiterated our original demands, that wasn’t true, but we did indicate where it was we’d started from and where it was that we were prepared to compromise on,” Senator Farrell revealed.

“So we were always prepared to compromise from our original position. We were just too far apart and they did not make a better offer.”

The Albanese government recently announced $2 billion to increase domestic critical minerals development – resources Europe highly coveted for domestic manufacturing and clean energy technologies under the proposed two-way trade deal.

Senator Farrell – who hopes to finalise an Indo-Pacific trade deal in San Francisco this week that would accelerate the clean energy transition – said international agreements were vehicles to foster strong commercial critical minerals partnerships.

“There could have been a relationship between the supply of critical minerals (to the EU) and greater access for agricultural products,” he said.

European Commission Executive Vice President Valdis Dombrovskis. Picture: Saul Loeb

“But we’ll have no shortage of suitors to both develop the mines and to purchase the downstream product, the Americans want it, the Japanese want it, the Koreans, the Singaporeans, the Chinese just for starters.”

Senator Farrell said while the EU could still invest in or access Australia’s critical minerals reserves, “the process is more difficult in the absence of a free-trade agreement”.

“But it does mean we don’t get greater access to the agricultural markets,” he said.

National Farmers’ Federation president David Jochinke said, despite the benched talks, “Minister Farrell had agriculture’s back.”

Senator Farrell also revealed that should Mr Dombrovskis “ring me tomorrow” to restart talks, he would agree to sit down.