EU and Australia revive stalled trade talks over agriculture, raw materials

The European Union is hoping to conclude a long-sought trade agreement with Australia which will include agricultural products and raw materials. With US President Donald Trump's tariffs upending the global trading order, the EU is ramping up efforts to build closer trade and security ties with other allies.

The EU is Australia's third-biggest trading partner, after China and Japan, while Australia is the bloc's 20th-biggest trading partner.

But negotiations between Brussels and Canberra hit a wall in 2023 after five years of painstaking discussions over Australia's push for access to the European market for its agricultural products such as beef and lamb.

This time around, talks are zeroing in on duty-free quotas for imported Australian beef, which the EU hopes to cap at around 30,000 tonnes per year, while Canberra wants access for 40,000 tonnes.

Supporters in the EU say a free trade agreement (FTA) with Australia would offer a range of opportunities, not just in the food industry.

The EU wants to cut its reliance on China for critical raw materials – needed for clean technologies like wind turbines and electric car batteries – and Australia's rich deposits would help Brussels diversify imports.

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Policy of derisking

German Foreign Minister Johann Wadephul, who is currently in Canberra, reiterated that Europe was "very interested in expanding further our cooperation in the raw materials sector".

Wadephul urged Australia to work with Europe to support the "international rules-based system" which has come under pressure from Washington and others.

US tariff threats and China's use of trade restrictions on products like magnets are forcing more countries and blocs to band together and reorientate their exports.

"We have to have a policy of derisking, and we have to have a policy which emboldens us – Germany and the European Union – to withstand all the pressure we do feel from big powers in order to preserve not only our economic but especially our political independence," Wadephul told reporters.

He added that he would like to conclude an FTA with Australia "quickly," as well as strengthen cooperation on supply chains and trade in critical minerals.

Australian Foreign Minister Penny Wong welcomed "Germany's strong support" for the FTA, adding she hoped to see progress in the "near future".

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'Like-minded partner'

In the meantime, the EU's top trade negotiator Maros Sefcovic and agriculture chief Christophe Hansen will hold talks with Australian Trade Minister Don Farrell next Thursday, the EU executive said.

"The EU is committed to strengthening relations with Australia, a strategic and like-minded partner. As always, progress in the sensitive phase of negotiations will depend on substance," EU trade spokesman Olof Gill said.

If the talks are fruitful, EU chief Ursula von der Leyen could visit Australia later this month.

The EU deal with Australia would be the bloc's third major agreement this year and bolster its efforts to stave off pressure from the Trump administration.

Brussels has recently clinched two deals that had been two decades in the making: the first with the South American Mercosur bloc, and then with India.

The EU is treading carefully to avoid a major new backlash from farmers, who are angry at the Mercosur deal because they fear it will cause an influx of cheaper goods produced with lower standards and banned pesticides.

European agricultural lobby groups will be paying close attention to the quotas for lamb, mutton and beef as well as sugar and rice, with the umbrella farm group Copa-Cogeca already warning against "any additional pressure" in sensitive sectors.

(with newswires)