Australia’s trade minister has warned the EU that he will not sign off on a trade deal unless the bloc opens its market to more Australian farm products — while hailing the thawing relations between Canberra and Beijing.
Don Farrell told the Financial Times ahead of talks in Brussels that an agreement with the bloc was only achievable if the EU backed down on its demands not to expose its farmers to competition. Australia, meanwhile, had extended an “olive branch” to China on its trade disputes, he said.
“We’re going to be a renewable superpower,” he said. “The Europeans have to play ball. Do they want to be part of the future or do they want to stick their head in the ground and remain part of the past?”
Among the specific EU demands is a reduced use of protected products such as parmesan and prosecco by Australian producers and a luxury car tax of 33 per cent on imports.
“We want to make sure they’re part of this growth thing, but they’ve got to stop their blinkers,” Farrell said. “They just say, ‘oh, jeez, we’ve got a problem with the French farmers, a problem with Italian winemakers’. They’ve got to think big. Now is their opportunity.”
Among his demands are better access for Australian beef, lamb and wine — with the EU offer on beef not being “ambitious” enough, he said. As for the car tax, he argued that it was difficult to reduce it as it would require the approval of the six states. However, he hinted that the threshold, of A$79,950 for a standard vehicle and A$89,332 for fuel-efficient vehicles, could be raised which would make EU marques more affordable.
He also rejected an EU request not to offer domestic buyers cheaper prices for minerals such as lithium.
While hopeful of an agreement, Farrell said he was willing to walk away, pointing out that Canberra was pursuing a deepening of its recent trade deal with India and was in the US-led Indo-Pacific Economic Framework. The UK has successfully applied to a pan-Pacific trading bloc that includes Australia.
“We’re not short of dance partners at the moment and the Europeans have to make a decision,” Farrell said.
The EU and Australia are both seeking to diversify their trade because of a reliance on China. Beijing blocked from May 2020 the import of Australian goods worth around A$20bn (US$13.3bn) annually, including coal and wine, after a series of security and trade disputes.
However, Farrell said relations with China had warmed under the Labor government that took office a year ago. Two-way trade hit record levels of A$300bn last year. A block on citrus and stoned fruits was lifted this week and Farrell said he was still working to reopen access for Australian crayfish exporters to China.
“We didn’t blink on national security or national interest issues,” he said but held out an “olive branch” on trade disputes by suspending a WTO case on barley imports, he added.
“So we’ve tried to show some goodwill, and I think that’s been reciprocated by the Chinese.” He has met his counterpart Wang Wentao three times in the two years and will soon host him at his vineyard in South Australia. “In the previous four years, there had been no meeting between Australia and China. I mean, we couldn’t get the Chinese to answer our phone calls, much less a face-to-face meeting.”
While the EU wants to “de-risk” its exposure to China, Australia favours “stabilising”, he said. “We’re not de-risking or decoupling. We want to continue to sell our products to China.”
He also denied that Australia was blocking Chinese investment except on very stringent security grounds. There were 270 projects by Chinese companies approved in the latest financial year.
“And if you extended that to commercial property arrangements, that’s another over 2,000 transactions between Chinese citizens and Australians. So we welcome Chinese investment.
“We’ve got to get more trade, not less, with them. We think we can both re-establish our trading relationship with China, but diversify.”
Source: Economy - ft.com
