Free-trade deal eludes Australia, EU

Five years of negotiations between the European Union and Australia over a free trade agreement have ended in frustration after the two sides failed to find common ground over the issue of agricultural market access.

Hopes were high that a meeting on the margins of the G7 meeting in Osaka, Japan, on the weekend could see the long-running talks brought to a successful conclusion, with European Trade Commissioner Valdis Dombrovskis and Agriculture Commissioner Janusz Wojciechowski both in attendance, but the two sides have stated publicly that a deal remains elusive.

"There was optimism that a deal was within reach," a spokesperson for the European Commission was quoted as saying by the Euractiv news website, suggesting that the blame lay with the other side going back over old ground. "The Australian side re-tabled agricultural demands that did not reflect recent negotiations and the progress made between senior officials."

"Unfortunately, we have not been able to make progress," Australian Trade Minister Don Farrell said in a video statement released on Sunday, adding negotiations will continue.

Australia has said it is unhappy about EU demands to restrict the labeling of Australian feta cheese and prosecco, which are protected categories in the bloc, and has also complained that the bloc has not been prepared to open its market to tariff — free beef and sheep imports, the Financial Times reported.

Initial discussions began in 2018, only to be temporarily halted in 2021 when Australia pulled out of a deal with France to supply submarines, to join a pact with the United States and United Kingdom known as the AUKUS.

Earlier this summer, relations looked to have improved and a deal seemed close, only for Farrell to walk away from talks over the issue of market access, saying he needed to discuss the matter further back home, but lower-level discussions continued in the hope of finding a breakthrough.

Late last week, Olivier Becht, the French trade minister, spoke of a "number of very positive advances", raising hopes of success, but in a podcast interview before the news broke, Farrell indicated that the window of opportunity was in danger of passing by, and could take several years to come round again.

"From this point forward, if we haven't got a deal, the Europeans move into their electoral cycle for elections next year, and I think we will have lost the opportunity for two, perhaps three years to come back and resolve this," he said.

"I think it will be quite some time before any Australian government or any EU leadership is able to negotiate a deal," added Murray Watt, Australia's agriculture minister. "And that's a bit of a shame."

In 2021, Australia struck a free trade agreement with the UK, while last year the EU agreed on a trade deal with New Zealand.