Australia and EU agree on free trade deal ’scope and ambition’

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SMH | 6 April 2017

Australia and EU agree on free trade deal ’scope and ambition’

by Nick Miller

Australia is a step closer to a free trade deal with the European Union, after finally reaching agreement on what such a deal might cover on Thursday.

The so-called "scoping study", a prelude to formal negotiations, has been delayed several times after it was initially expected late last year.

The hold-up was put down to internal debate within the EU, where such deals have recently met stiffer resistance.

On Thursday afternoon, Australian time, the EU Commissioner for Trade Cecilia Malmstrom and Australia’s Trade Minister Steven Ciobo spoke on the phone and formally agreed on the scope and ambition of a future FTA.

After the call Ms Malmstrom tweeted she was "looking forward to receiving a mandate from MS [Europe’s member states] so that we can start negotiating soon with this very important friend and partner".

Mr Ciobo said the scoping exercise, which had taken less than 18 months, was a "key step" towards the launch of negotiations.

"An Australia-EU FTA has the potential to drive economic growth by opening up new export opportunities, enhancing investment flows, and removing trade barriers for businesses," he said.

"This initiative is an important element of the Turnbull Government’s ambitious trade agenda."

Australia’s ambassador to the EU, Mark Higgie, called the development "an important step".

The EU Commission will now ask member states for the authority to launch formal negotiations, and for specific negotiating directives.

The EU (including the UK) is Australia’s third-largest trading partner, with more than $60 billion in bilateral trade. It is Australia’s biggest two-way trade in services partner, and biggest source of service imports.

However two-fifths of that services trade is with the UK, which will likely be out of the EU before the free trade deal comes into effect.

The EU minus the UK is second to the US in total services trade, second in imports and third in exports.

EU exports to Australia include mostly vehicles and machinery but it also registers a trade surplus in the agri-food sector. EU companies supply commercial services worth nearly $28 billion to Australia and hold investment in the country worth more than $200 billion.

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source: SMH