With growing European tensions due to the Russia-Ukraine conflict, the European Union (EU) is looking to negotiate a free trade agreement with Australia to take reliance off using Russia’s resources.
In new statements coming from Head of trade and economics at the EU Delegation in Australia, Cornelis Keijzer, said he had hopes for “decisive progress” on the agreement by early 2023, but no specific deadline has been set.
Russia currently supplies significant energy and resources to the EU, but this new deal could have the EU refocus on Australia for critical minerals.
“We’re looking for new sources. So that is what we’re looking for, from Australia: the possibility to source those raw materials now from Australia,” Mr Keijzer said to The Age.
“Things like lithium, cobalt, critical materials, but also iron ore. We want to buy from Australia, no longer from Russia.”
Federal Trade Minister, Don Farrell, said it made sense for the EU to move away from relying on Russia as by “having all your eggs in one basket, you put yourself in a precarious position”.
Previously, formal negotiations on a free trade agreement had been halted by Australia’s shock decision to stop a $90 billion submarine deal with France.
Now, Mr Farrell has said Australia is interested in negotiating with the EU regarding critical mineral supplies.
At the World Trade Organisation meeting in Geneva, Mr Farrell spoke with European delegates and said the “vibe coming from the Europeans is that they want to do this deal”.
Terms of the free trade agreement are still in negotiations, but early statements suggest the EU wants to see Australian Custom tariffs removed.
Mr Keijzer said there was still “a commercial disadvantage” if the tariffs are not removed, as it affects two-thirds of what the EU exports.
Mr Keijzer maintained that Australia is still a crucial trading partner.
“In terms of a provider of some of these very strategic raw materials, [Australia] is important,” Mr Keijzer said.
“Australia is also important as a customer; we do sell a lot of goods in Australia. So there’s an interesting trading relation that can still be more developed, we think, especially as the Australian economy has a need for more diversified customers.”
Further political meetings will occur later in July 2022, with Spanish Trade Minister, Pedro Sánchez, travelling to speak with Australian Prime Minister, Anthony Albanese.
In September 2022, EU parliamentarians are also set to travel to Australia, such as UK’s Trade Minister Anne-Marie Trevelyan.
“We are working on this very hard and hope to conclude a deal as soon as we can,” Mr Keijzer said.
More to come.
