(MENAFN- Asia Times) After five years of intense negotiation, the proposed preferential trade agreement (PTA) between Australia and the European Union is in trouble. On October 29, 2023, talks were suspended with little immediate prospect of resumption.
This setback, plus other recent developments in EU preferential trade policy, offer some broad lessons – for both Australia and the region.
The failed negotiation is, in part, a victim of current times. With liberal trade policy in retreat , government-fueled industrial policy is on the rise, and, according to the Eurobarometer Poll of July 2022 , the majority of Europeans now view protectionism positively.
The immediate cause of the breakdown in the talks was, unsurprisingly, agriculture. This is the sector that, given EU intransigence, was a key factor in the failure of the Doha Development Round of multilateral trade talks. Agriculture is still the beneficiary of massive industry assistance within the European Union.
Though there has been some reform of the Common Agricultural Policy, according to the World Trade Organization (WTO) Common Agricultural Policy outlays remain largely unchanged, at roughly one-third of the European Union's budget. And tariffs on EU farm imports remain three times higher (at some 20%) than those on non-agricultural goods.
Australia's particular concerns during negotiations with Brussels arose from EU resistance to opening up its market to Australian beef and sheepmeat, and protective geographical indications that would restrict the labeling of Australian feta cheese and prosecco.
As highlighted by the WTO Trade Policy Review of the EU, the number of products subject to EU“geographical indication protection” continues to rise.
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