🇪🇺 Australia’s landmark EU trade deal opens a $30 trillion door, though not without critiques
Australia-European Union Free Trade Agreement (A-EU FTA)
Farmers slam EU deal as worst for Australian agriculture
‘Extremely disappointing’ EU deal offers little meaningful access
After eight years of negotiations, Australia and the European Union concluded a free trade agreement on Tuesday, that is, the A-EU FTA. For Australian exporters, it is the most significant market opening in a generation. Though it has some arguing for its flaws.
Once fully implemented, 98% of Australia’s goods exports will enter the EU duty-free, meaning greater market access for Australian exporters, unlocking a major high-income market of 450 million residents, with a $30 trillion GDP.
Goods such as wine, barley, and seafood will see tariffs eliminated from the EU. Meaning that Australian goods can compete in the EU market, where the removal of a tariff means that EU residents face lower prices for Australian goods, creating an expansion along the demand curve and increasing Australian export quantities. A structural benefit for the Australian trade balance.
Though, many critique the deal, with the National Farmers’ Federation (NFF) calling it “extremely disappointing.” While Australian exporters now see an 8x increase in the amount of duty-free beef exports to the EU, at 35,000 tonnes, this figure came out much lower than what similar deals were able to land, with New Zealand receiving 163,769 tonnes of duty-free access for sheep meat. With Andrew McDonald, chair of the Australia-EU Red Meat Market Access Taskforce, saying that “to land a deal so far below what other suppliers have secured is genuinely bewildering.”
