EU and Australia deadlock in push for a free-trade agreement

The European Union and Australia deadlocked in negotiations aimed at wrapping up a free-trade deal this week, putting an accord at risk as the partners struggle to consolidate critical supply chains among allies.

Sticking points in the negotiations include access for some food products, in particular Australian beef, according to people familiar with the discussions. 

The two sides were aiming to conclude talks this week ahead of the NATO summit in Vilnius, since Australian Prime Minister Anthony Albanese is in Europe to attend the leaders’ gathering. The European Commission, the EU’s executive arm, wanted to wrap up talks before the summer break.

“We regret it was not possible to conclude our talks with Australia this week,” commission spokeswoman Miriam Garcia Ferrer said in a statement. “We rely on our Australian partners to work with us to get this over the line soon. Our door remains open.”

The setback comes at an awkward time as Europe works to expand its trade relations to reduce dependencies from certain countries including China and cement alliances amid Russia’s ongoing invasion of Ukraine. Talks started more than five years ago and the EU is Australia’s third-largest trading partner in goods after China and Japan. Australia is the EU’s 18th biggest.  

Australian Trade Minister Don Farrell said on Monday that he was prepared to walk away from the negotiations as the Australian side flagged concerns over a lack of substantial access to the EU market for their agricultural products. 

A delay risks scuppering the entire deal as the EU’s priorities will shift elsewhere after the summer break, said the people, who asked not to be identified because the talks are private. 

The partners have also been discussing in parallel a raw materials agreement to increase access to Australia’s lithium deposits, one of the largest on the planet.

Trade in goods between the EU and Australia accounted for €56.4 billion ($62.1 billion) last year.