The European Union and Australia deadlocked in negotiations aimed at wrapping up a free-trade deal this week, putting an accord at risk as the partners struggle to consolidate critical supply chains among allies.
Australian representatives ended talks in Brussels on Tuesday after both sides failed to reach a compromise on final points of contention. Sticking points in the negotiations include access for some Australian agricultural exports, in particular beef, according to people familiar with the discussions.
Australian Trade Minister Don Farrell said the two sides hadn’t been able to bridge the gap between what the EU was offering and what Australian producers and businesses expected.
“We are prepared to persevere and persist until we get the right result both for Australia and Europe,” Farrell said in Brussels, after the talks concluded without an agreement.
The two sides were aiming to conclude talks this week ahead of the NATO summit in Vilnius, since Australian Prime Minister Anthony Albanese is in Europe to attend the leaders’ gathering. The European Commission, the EU’s executive arm, wanted to wrap up talks before the summer break.
“We regret it was not possible to conclude our talks with Australia this week,” commission spokeswoman Miriam Garcia Ferrer said in a statement. “We rely on our Australian partners to work with us to get this over the line soon. Our door remains open.” Both sides agreed to restart talks in August.
The setback comes at an awkward time as Europe works to expand its trade relations to reduce dependencies from certain countries including China and cement alliances amid Russia’s ongoing invasion of Ukraine. Talks started more than five years ago and the EU is Australia’s third-largest trading partner in goods after China and Japan. Australia is the EU’s 18th biggest.
Australia had made it clear since negotiations entered a new phase in early June that it was dissatisfied with the EU’s offer for market access. Albanese backed his negotiators’ stance at a press conference on Monday in Berlin, saying talks would “only be concluded when we have a good deal.”
A delay risks scuppering the entire deal as the EU’s priorities will shift elsewhere after the summer break, said the people, who asked not to be identified because the talks are private.
The partners have also been discussing in parallel a raw materials agreement to increase access to Australia’s lithium deposits, one of the largest on the planet.
Trade in goods between the EU and Australia accounted for €56.4 billion ($62.1 billion) last year.
(Updates with Australia government comment from second paragraph.)
Author: Jorge Valero, Alberto Nardelli, Lyubov Pronina and Ben Westcott
