Progress on Australia-EU-UK trade talks

Apr 23, 2021

Dan Tehan may well come to regret the timing of his swing through Europe to try and reignite interest in trade deals between Australia and the European Union and the United Kingdom. There has seldom been a week in April when the political agenda right across Europe is so full of events and crises of various shapes and sizes, demanding the attention of the European Commission, which has responsibility for trade in the 27 nation Union, and individual leaders.

Apart from meetings at Berlaymont, the Brussels headquarters of the European Commission, Tehan is scheduled to meet counterparts in Paris and Berlin. He will then fly to London to meet his opposite number, UK international trade secretary Liz Truss. There he will try to kick-start the talks on a UK-Australia trade agreement, stalled because of British concerns over Australian agricultural imports and animal welfare.

The most popular time for Australian ministers to visit Europe is June, a more relaxed month and the start of the summer social season, with many sporting and cultural events. In the United Kingdom, ministerial visits more often than not culminate with a trip to Royal Ascot, a night at Glyndebourne opera, and Centre Court tickets for Wimbledon. On this, his first significant overseas trip, Tehan will find his hosts on both sides of the Channel heavily distracted – not just by a third wave of COVID-19 (or the threat of it) but also mounting security threats from Russia, rising political uncertainty, faltering economies, the re-emergence of corruption and sleaze as a major issue, a united focus on reducing greenhouse gas emissions to zero by 2030 (not 2050) and a big brawl over football, Europe’s dominant sport. Within this maelstrom, there will be little time or inclination to discuss improved access for Australian agriculture.

Germany’s chancellor, Angela Merkel, is weighed down by anxieties about the massing of Russian troops and military hardware on the Ukrainian border, which already has NATO on high alert. Merkel is pondering cancellation of the Nordstrom 2 project, designed to bring critical gas supplies to Europe’s industrial powerhouse, but no easy or swift energy alternatives are available. On Monday came the added complication that the two Russian agents wanted by Interpol for the Novichok poisoning in Salisbury in 2019 were earlier involved in blowing up a Czech arms store, killing two people.

This week’s big event for Europe’s leaders will be president Joe Biden’s April 22 summit to rally support to combat climate change and reduce greenhouse gas emissions to zero by 2030.  Biden’s initiative fulfills an election promise, to the very date he earmarked in last fall’s  campaign. It has the strong support of the EU and the United Kingdom and is widely seen as a dress rehearsal for the United Nations COP26 climate change conference to be held in Glasgow in November, chaired by Boris Johnson who leads the G7 group of nations for the second half of this year . The importance of this week’s summit has been greatly enhanced by the agreement, announced on Monday, between China and the United States that they will work closely together on climate change, following the mission to Shanghai by Biden’s climate change secretary John Kerry. In a joint statement, the two sides committed to “concrete  actions” to reduce global emissions in the 2020s.

The governing coalition in Canberra has been widely seen around the world as a laggard on climate change but, within hours of the Chinese-American announcement, Prime Minister Scott Morrison modified his position, sparing his trade minister some embarrassment as he does the rounds in Europe. Morrison, who will be one of the 40 leaders participating in Biden’s summit, told the Business Council of Australia that the adoption of new technologies would be the route whereby Australia achieved its emissions targets. Without being specific, he called it “the commercialization of lower emissions technology”.  Australia, he said, would not achieve net zero emissions by taxing industry or “the cafes, dinner parties and wine bars of our cities”.

Morrison did not touch on some issues likely to be thrown at him at the April 22 summit. Biden is asking all countries to support his call for an end to subsidies of all fossil fuel production. The EU and the UK have already agreed that petrol and diesel vehicles should be phased out from 2030. Both are measures that Australia’s trade negotiators are likely to be pressed to accept.

It seems unlikely that Tehan will achieve much progress in Brussels. He has criticised as protectionism the Commission’s decision to withhold vaccines bound for Australia. While both the German and the French governments have been critical of Commission president Ursula von der Leyen’s slow rollout of the vaccines in the EU, officials in Berlin and Paris will stoutly defend her, and suggest Australia could have ramped up production itself.

In the UK, the Johnson government is facing no fewer than six significant public inquiries into the lobbying efforts of former prime minister David Cameron in support of the Australian financier Lex Greensill, and is heavily distracted.

In February, negotiations on a UK-Australia trade deal made some progress on peripheral matters, but access to the UK market for Australian beef remains a difficult issue. British farmers are already in revolt against the Conservative government for loss of income, and Britain’s trade negotiators are in overdrive, trying to sort out the mess created by Johnson’s promise that there would be no border down the Irish Sea between Britain and Northern Ireland; it is a lie that now threatens to bring back bloody conflict to the province.

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