Coalition demand to renegotiate $10bn EU trade deal

The Coalition has all-but confirmed it will try to sink a $10bn-a-year free trade deal with the EU, with Nationals leader Matt Canavan doubling down on his claim it represents “the worst deal ever” because it falls short of beef industry demands.

Canberra and Brussels finalised terms for the Australia-EU free trade agreement (FTA) in March, with European Commission President Ursula von der Leyen navigating airspaces shuttered by wars to formally close almost a decade of talks in Canberra.

The deal, which both the Australian and European parliaments must ratify, would slash levies on 97.8 per cent of Australian exports to the EU.

The Coalition has taken issue with the FTA’s red meat quotas.

Australian producers would be able to export 35,000 tonnes of beef tariff free – an eightfold increase on current levels.

They would also be able to export 30,850 tonnes of sheep meat.

But Senator Canavan on Wednesday accused Labor of “trying to pull the wool over farmers’ eyes”.

“The fundamental problem is that the deal is not reciprocal,” the opposition trade spokesman said.

“Australia is effectively opening its market to European producers, including removing tariffs on all EU agricultural exports while key Australian agricultural exports into Europe will remain restricted by quotas, tariffs and massive European farm subsidies.

“That is not genuine free trade.”

He said Trade Minister Don Farrell would not negotiate with the Coalition to reach consensus.

“When Labor raised issues about the China free trade agreement, and threatened to block its passage, we went back and renegotiated the deal to deliver bipartisan outcomes,” Senator Canavan said.

“Why won’t Labor do the same for Australia’s interests here?”

His comments came in response to Senator Farrell warning it had “become clear” passage of the EU FTA “through the parliament is not guaranteed”.

“In recent weeks, as politics in our country has shifted to entertain and reward populism, some in our parliament have been tempted to signal that they will oppose this agreement – choosing to chase headlines rather than practical outcomes,” Senator Farrell told an Australian Chamber of Commerce and Industry event.

“Sadly, some of those who are indicating that they will try to block this agreement are the same members and senators who claim to represent the hardworking businesses in this very room.”

‘No second chance’

In a world rocked by wars and tariffs, Senator Farrell made the case for “more trade, not less”, pointing to Australia’s record $1.3 trillion in trade last year as proof that Labor’s approach was working.

“The world is currently falling into two groups – those putting up barriers, blocking markets, and imposing taxes and tariffs, and those continuing to build connection, strengthen trading relationships, and find new markets,” he said.

“This government chooses to be the latter – we will not be tempted into the error, into the fallacy or into the lie that locking ourselves away from the world will help Australian business or consumers.

“We will not send a message to the world that we are not open for business, that we are not interested in winning foreign investment, and that years of hard-fought negotiations can be sacrificed on the altar of someone’s political ambition.”

Speaking to the EU FTA, he cautioned “there is no second chance with the EU if we choose to walk away from this deal”.

“To those that seek to block this agreement, the question will come, now or later, why did you sacrifice gains for Australian exporters, Australian businesses, and Australian jobs just to chase a headline or a vote?” Senator Farrell said.

“Now is the time for a unified Australia-first approach to free trade, not for dragging us back decades down the path of protectionism and isolation.”

Both Australian and EU officials have said the FTA is also about sending a message to the US and China that economies can seek alternative trading partners if they flout international norms.

Senator Farrell echoed that, saying that in “uncertain times, Australia’s answer should not be to retreat”.

“It should be to compete, to diversify, to build resilience, to back our businesses and to make sure the benefits of trade and tourism are felt by workers, families and communities right across Australia.”