The South Australian Business Chamber Today

What’s in a name? Australia – EU Free Trade Agreement

Wednesday, August 31st 2022

Australia and the European Union (EU) started negotiations to establish a Free Trade Agreement (FTA) in 2018. Discussions are now accelerating after a slowdown in 2020 and 2021, mostly due to Covid-19. The next round of talks will take place in October, and both sides hope to complete the FTA in the first half of 2023.

It is widely expected that an FTA with the EU would benefit Australia. In 2019, the EU was Australia’s third largest trading partner (behind China and Japan). It is a market of almost 450 million people with a GDP of $23 trillion. Having tariff-free access to the region would be important for Australian businesses, especially those trying to diversify following China’s decision to restrict its market for Australian goods significantly. The Australian Government expects a broad range of tariff reductions and hopes that most trade will be tariff-free when the FTA commences. While it also aims for full tariff liberalisation in agriculture, negotiations on some agricultural products are expected to be challenging.

Should an agreement be reached with the EU, over 80 per cent of Australia’s trade would be covered by FTAs. In the past three decades Australia has signed similar agreements with a range of trading partners, including Japan, Malaysia, New Zealand, Singapore, and the US. An FTA with the UK has also been signed but is yet to commence as both countries’ parliaments need to ratify it. 

Notably, Australia’s FTA with the EU will cover trade aspects, facilitate investment on both sides, provide access to government procurement, and ease requirements in recognition of professional qualifications. This last aspect could help Australia’s skills shortage.

However, a difficult part of discussions is on Geographical Indications (GIs), which Australian Government officials continue to negotiate with their EU counterparts. GIs identify goods that originate in a specific geographical region and possess a certain quality, reputation or another known characteristic. Champagne’ is a well-known example of a GI. Only the Champagne region in France can use this name, while Australian wine-makers call a similar product sparkling wine’. The EU had initially asked the Australian Government to protect 236 spirit names and 172 agricultural and foodstuff names in the FTA. Although most of these would not be familiar to most consumers, a number would have ramifications for Australian businesses. 

Queso Manchego, Lentille verte du Puy, Neufchâtel, Roquefort, Kalamata, Feta, Csabai kolbász, Asiago, Fontina, Gorgonzola, Grana Padano, Mortadella Bologna, Parmigiano Reggiano, and Taleggio are all on the list. The dairy industry would potentially no longer be able to label their products as feta’ and parmigiano/​parmesan’ cheeses, regardless of whether they export to the EU or produce for the domestic market. The same goes for kalamata/​calamata’ olives. For the meat industry, a GI could prevent use of the term kransky’.

The EU is being less strict about other GIs. For example, Australian cheesemakers would still be able to use names camembert’ and brie’, they would just not be allowed to call their products camembert de Normandie’ or brie de Meaux’. 

If Australia ultimately agrees to protect EU GIs under the FTA it is likely that it will also create a domestic GI system. This would also enable Australian businesses to register their own GIs, such as Kangaroo Island honey, Kakadu plum and Tasmanian whisky. 

Negotiations are ongoing, and the Australian Government has not yet agreed to protect any EU GI terms. It will only do so if the overall FTA deal benefits Australia’s interests, including the agricultural sector. Yet, protecting these names under the FTA is a very realistic scenario. New Zealand recently signed a similar agreement with the EU, under which it will protect close to 2,200 GIs. 

The Australian Government has received extensive feedback from the Australian industry on their interests and concerns relating to the EU’s GIs requests and is representing these positions in the negotiations. The Department of Foreign Affairs and Trade negotiators continue to welcome feedback from Australian stakeholders and can be contacted via a‑[email protected].

From our side, the South Australian Business Chamber has raised the question of compensation for affected businesses, particularly dairy, meat and spirit producers, with the Department of Foreign Affairs and Trade. We will continue to monitor the situation and advocate on behalf of the South Australian business community to ensure that the FTA does not disadvantage producers. 

Author

Yarik Turianskyi

Senior Policy Advisor
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