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Event report - The EU-Australia FTA: Can the EU still do trade deals?

18 October 2016

On 17th of October, the EU-Asia Centre, the Foreign Trade Association and the Australian Embassy co-organized a panel discussion on: “The EU-Australia FTA: Can the EU still do trade deals?” Opening the event Fraser Cameron, Director of the EU-Asia Centre, said that free trade and globalization were being called into question by many voices on both sides of the Atlantic. Just a few kilometers from Schuman the Wallonia parliament was blocking the ratification of the EU-Canada FTA (CETA).

 

In his welcoming remarks, Australian ambassador Mark Higgie said that it was a propitious time to organize this event as both sides had just started a scoping exercise that should lead to FTA negotiations beginning next year. The EU was Australia's third largest trading partner after China and Japan and there were many benefits to be gained from an FTA.

 

Christian Ewert, Director General, Foreign Trade Association´╝îindicated three main reasons why the EU is finding it difficult to conduct and close trade agreements: First, EU trade agreements today are very ambitious (including investment, public procurement, regulation, etc.) and that is both a blessing and a curse. Second, the trend towards greater transparency triggers democratic and critical discussions often focusing more on the risks than benefits of an FTA. Third, The EU has a complex decision making process.

 

To counter the above it was important to place more emphasis on communicating the benefits of FTAs, giving the EU more resources, and simplifying ratifications procedures. We should use the EU-Australia FTA as a showcase that transparency, open dialogue and a wide participation of stakeholders can contribute to a truly successful and inclusive modern trade agreement covering sustainability, the environment and core labour standards. The EU focus on the Asia-Pacific was also to be welcomed as this is where future growth lies. In this context the establishment of the EU-Australia Leadership Forum was also an encouraging move.

 

Peter Berz, Head of Unit in DG Trade, said the EU was good at launching and negotiating trade deals but less good at ratifying them. The EU had negotiated many successful trade deals in recent years including with Vietnam, Singapore, Korea, Canada, Ecuador, and the East African Community; and it was making good progress with Japan, Mexico, Tunisia and others. But as the CETA debate showed there was a problem in the multiple legislatures involved in the ratification process. DG Trade had a very good track record in involving civil society but sometimes NGOs did not want to believe the official position.

 

Alison Burrows, First Assistant Secretary in the Australian Office of Trade Negotiation and lead on the EU-Australia FTA, said that although there were increasing political problems associated with FTAs she would not be here if she did not think the EU could do deals. Australia was firm believer in the multilateral approach but as Doha had stalled Australia had signed many FTAs with its major partners in Asia and was now awaiting ratification of the TPP. On trade relations with a like-minded partner such as the EU there was much to be gained from an FTA. Australia was no longer just an agricultural exporter – indeed the EU exported more food products to Australia than vice versa. The proposed FTA would help both sides reach their full trade potential and take into account investment, services, green goods as well as regulatory cooperation and the digital economy. Canberra’s usual aim in FTAs was zero tariffs. It was important to involve civil society and ensure the highest levels of transparency. A UK-Australia trade deal would happen “when the time is right. And that is not when the U.K. is a member of the EU.”

 

Peter Berz said that that the proposed FTA would complement the political agreement between the EU and Australia. The Commission’s mandate to start the scoping exercise stated that it should take into account the EU’s agricultural sensitivities. Dairy, sheep and sugar were some of the sensitive sectors. The Commission is working on its internal impact assessment. A public consultation took place in the spring this year and the overall results confirm that stakeholders are in favor of moving towards an FTA with Australia.

 

Christian Ewert agreed that the proposed FTA would be a win-win for both sides. The elephant in the room was TPP and it was by no means clear that it would be ratified by the US.

 

In the discussion there were questions about Brexit, how to achieve greater transparency in trade negotiations, whether FTAs create jobs, public procurement, the role of media, the investor dispute settlement system and whether mammoth trade deals should be broken down into smaller parts.