26 Apr

'Australia at turning point in trade talks with UK: Dan Tehan' by Hans Van Leeuwen, The Australian Financial Review

London | Australia’s talks with Britain for a quickfire trade deal are at a “turning point”, Trade Minister Dan Tehan has said, amid speculation Prime Minister Scott Morrison wants to sign on the dotted line with his British counterpart Boris Johnson when they meet at a G7 summit in June.

The free trade agreement talks were launched last June, and it is expected that nailing down a full deal in the next seven weeks might prove too ambitious – the two leaders might have to sign a higher-level agreement instead.

Bur Mr Tehan said his visit to London had allowed for two days of face-to-face talks on Thursday and Friday with Trade Secretary Liz Truss, which could crunch the outstanding issues and “reach a turning point ... and hopefully get the deal done”.

Crunch talks ... both Trade Minister Dan Tehan and British Trade Secretary Liz Truss are keen for a result.  Alex Ellinghausen

“It’s a big commitment to fly across the world, to come here for two days and head back into two weeks of quarantine. So I’m very keen to make sure we make as much progress as we possibly can,” he said.

The pivotal meetings got off to a rocky start, as British trade bureaucrats briefed Britain’s Daily Telegraph newspaper that Australia was slowing down the negotiations and resisting agreement, and that Ms Truss would have to strong-arm the “inexperienced” Mr Tehan.

Ms Truss subsequently apologised directly to Mr Tehan for the article, which was evidently playing to a domestic audience – the Trade Secretary is tipped for ministerial promotion, and is keen to put runs on the board as her FTA talks with the US falter.

Mr Tehan said the sticking points, after four rounds of virtual talks since last June, were in the areas of investment liberalisation, geographical indications, movement of people, and dropping barriers for key goods, particularly in agriculture.

Mr Johnson and Ms Truss are under heavy pressure not to sweep away agricultural quotas and tariffs – left over from the days inside the highly protectionist European Union – amid fears Australian imports could undercut British farmers on price.

But Mr Tehan promised the FTAs with both Britain and the EU would deliver for farmers.

“As someone who grew up on a sheep and cattle farm – and someone who represents one of the most productive, if not the most productive, agricultural areas in Australia – I’ll be doing everything I can to pursue the interests of our farmers,” he said.

Britain-based Australian businesses are particularly keen for the FTA to make it easier for skilled professionals to get visas to work in each other’s countries – something both countries’ border and immigration agencies have at various times resisted.

“We’d like to see as much as possible the free flow of people in the professional services space. Youth mobility is another area that we’re looking at,” Mr Tehan said.

“These are things which I think are eminently doable ... but they do have some sensitivities that both of us have to work through.”

Climate change and sustainability issues have also been raised as a possible obstacle to quickly wrapping up the FTA – there is a risk that Britain and the EU could obtain a lever to pressure Canberra over emissions reductions targets.

Mr Tehan said “trade and sustainability chapters” were an increasingly important part of FTAs, but bilateral deals were a separate track to multilateral processes such as the UN climate talks that created the Paris Agreement.

“When it comes to bilateral free trade agreements we want to talk in detail on the importance of sustainability. But when it comes to international commitments and other arrangements, that’s much better being negotiated and agreed in multilateral environmental agreements,” Mr Tehan said.

Mr Tehan discussed the Australia-EU FTA with European Trade Commissioner Valdis Dombrovskis during his visit to Brussels earlier in the week, where 10 rounds of negotiations have already been completed.

“We made substantial progress in the 10th round of negotiations, in fact it was the best round of negotiations that we’ve had. And both Commissioner Dombrovskis and I have been very keen to build on that momentum,” Mr Tehan said.

“There is going to be an 11th round in early June ... [and] we’re both very pleased with the substance of the negotiations and the direction that it’s heading in.”

Although climate and agriculture issues have been hard graft in the negotiations with the EU, Mr Tehan said he had held constructive talks this week with the EU farmers’ federation and the French and German trade ministers.

“As a matter of fact, the German trade minister said to me, ‘if Europe can’t do a free trade agreement with Australia, who can they do an agreement with?’,” Mr Tehan said.

Mr Tehan also took up the cudgels with Brussels on the EU proposal for a carbon border tax on imports, which is designed to ensure European companies are not penalised by having to buy carbon emission permits.

“One of the key points in the discussions that we had was that they would have to be WTO-consistent, and also that we hold an inherent fear that they would be used for protectionist purposes,” he said.

He said he lobbied for Europeans to focus instead on cutting tariffs on environmental goods and services. And he noted that the initial sectors covered by any EU carbon border tax would be limited to steel and cement, “so there’s a long way to go on that”.

 

This aritcle was written by Hans Van Leewuen for the Australian Financial Review. Click here to access the original article. 

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