Overcoming legacies of foreign policy (dis)interests in the negotiation of the European Union–Australia free trade agreement^*

* The opinions expressed in this article are the author’s own and do not reflect the view or position of the Australia and New Zealand School of Government.

ABSTRACT

Despite a troubled trade history dominated by disputes over agriculture, the negotiation of a European Union (EU)–Australia free trade agreement (FTA) was initiated in 2015. The initiation of these negotiations was made possible because of the shift in EU trade policy towards the negotiation of what the EU terms ‘new generation free trade agreements’. The EU has concluded FTA negotiations with South Korea, Singapore, Vietnam and Canada, and is negotiating other FTAs— notably with Japan and the USA . The EU faces many commercial challenges to its FTA negotiations that go beyond tariff reduction, including the protection of its geographical indicators, public procurement and investor–state dispute settlement. These issues are likely to be substantial features of any EU FTA with Australia. In addition to these challenges, the promotion of sustainable development interests and human rights through FTA negotiations is an important component of the EU’s approach. The EU’s position on the trade-related aspects of sustainable development and the negotiation of human rights conditionality has presented significant challenges to the EU’s trade agenda, particularly in negotiations with Canada and Singapore. This article draws lessons from the EU’s new generation trade agreement negotiations to date. It compares these negotiations with Australia’s approach to FTA negotiations, and analyses potential stumbling blocks for an EU–Australia FTA in light of past tensions in the relationship. The article argues that shifts in both EU and Australian trade policies and positive developments in the relationship mitigate past obstacles to a negotiated agreement. However, EU– Australia relations still suffer from the tyranny of distance. The resulting deficit in foreign policy salience between the EU and Australia broadens the best alternatives to a negotiated agreement.

KEYWORDS:

• EU–Australia relations
• foreign policy
• FTA
• human rights conditionality
• sustainable development
• trade policy

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Lachlan McKenzie is a Principal Advisor in Research and Policy at the Australia and New Zealand School of Government. He completed his PhD at the School of Social and Political Sciences at the University of Melbourne, with research interests in public policy, European integration, EU–Australia relations, and international trade policymaking and norms in foreign policy. He holds a Bachelor of Arts (Honours) from Monash University and a Master’s in International Relations from the University of Melbourne. In 2013–14, he was a postgraduate fellow at the European University Institute in Florence.

Notes

* The opinions expressed in this article are the author’s own and do not reflect the view or position of the Australia and New Zealand School of Government.

1. Diplomatic relations were initiated in 1962.

2. Indeed, Britain still factors significantly in Australia’s foreign policy decision-making on the EU. Uncertainty around the future of the UK’s relationship with the EU may have an impact on the EU–Australia relationship and negotiations for an FTA. The continuing significance of the UK in Australian political culture was evident in Prime Minister Malcolm Turnbull signalling interest in an EU–Australia FTA before the beginning of formal negotiations for Britain to leave the EU (Karp, 2016).

3. However, Australia’s negotiation of the Pacific Agreement on Closer Economic Relations (PACER) Plus represents a new approach for Australia, as Australia’s focus in negotiating this agreement is promoting economic development in the Pacific.