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Europe next on the agenda for a free trade deal

Europe next on the agenda for a free trade deal article image

The European Commission’s recently released trade and investment strategy has indicated it will seek authorisation from the EU’s member countries to negotiate a Free Trade Agreement (FTA) with Australia.

Minister for Trade and Investment Andrew Robb said the announcement is an important initial step towards launching an Australia-EU FTA.

Having concluded landmark trade deals with Korea, Japan and China together with the 12-country Trans Pacific Partnership Agreement (TPP), the EU presented “something of a missing piece” Mr Robb said.

“An FTA has the potential to unlock new opportunities and levels of market access across a range of areas such as agribusiness, services and high-value manufacturing, Mr Robb said. “For Australian consumers it could also deliver reduced prices on a range of quality European goods including cars.”

The EU is already a major market for Australia with its members combined constituting the world’s biggest economy.

“The EU bloc represents our second largest trading partner with two-way trade exceeding $80 billion – more than 12 per cent of our total trade,” Mr Robb said.

The EU is also the single largest source of investment into Australia, worth $959 billion in 2014, including nearly a quarter of our FDI (Foreign Direct Investment).

Before any bilateral negotiations can begin, agreement must be sought from the EU’s 28 member countries.

‘We must reduce reliance on one sector’

“Our ambitious pursuit of trade and investment is a key element of this government’s microeconomic reform agenda in this critical post-mining boom period, Mr Robb said.

“It is an important part of our efforts to support the diversification of our economy and reduce our reliance on any one sector or any one market.”

Mr Robb praised Australia’s Minister for Finance Mathias Cormann for the groundwork he has laid, which has helped build momentum towards an FTA negotiation. 

Earlier this year, Senator Cormann visited Europe and met with key government ministers in Germany, France, Italy and Belgium and senior European Commission Representatives. 

Mr Cormann explored options to deepen the trade and investment relationship with Europe – in particular a Free Trade Agreement between Australia and the European Union.

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