Sydney – 24 April 2023 – The European Australian Business Council (EABC) strongly welcomes the political commitment of the European Union (EU) and Australia to conclude a comprehensive and ambitious free trade agreement in 2023. Time is now of the essence to seal the deal – the window of opportunity during the mandate of the current European Commission is closing with European Parliamentary elections coming up in May 2024.
With rising geopolitical tensions, the EU and Australia recognise the need and urgency to secure enhanced partnerships with like-minded partners which will not only safeguard mutual economic interests and opportunities, but also encourage necessary investments and secure new supply-chains to ensure the sustainable and digital transitions. With strong political alignment between the EU and Australia, the case for concluding the agreement has never been stronger – to optimise flows of trade, investment, people, ideas and technology – in both directions. The crucial round of negotiations taking place in Brussels this week should set the scene for an agreement to be reached by the European summer.
A successful deal for business and consumers should include the following elements:
- Ambitious trade liberalisation at the heart of the agreement
- We call for the removal of tariffs and quotas on all exports as well as the facilitation of the cross-border supply of services to expand markets for businesses and access for consumers. This would be especially beneficial for SMEs, which currently face challenges in exporting due to high tariffs and other barriers. In particular, a meaningful market access deal for agricultural goods is essential for reaching a good deal for all.
- The increasingly volatile international environment enhances the need to deepen ties and secure reliable supply chains with trusted trading partners, notably in the race to develop the net-zero industry. As such it is crucial to ensure a level playing field with like-minded partners, most importantly in the sectors of energy and critical raw materials to provide the right incentives for investment towards a common sustainable future.
- As “globalisation with friends” has never been more important, we also strongly encourage opening public procurement markets. As studies have shown, in addition to opening new markets and increasing transparency in the procurement process, further competition will lead to greater efficiency whilst lowering prices for the benefit of consumers.
- Strong mobility provisions for the temporary movement of natural persons (TMNP)
- The EU-Australia free trade agreement should include ambitious TMNP provisions, similar to the ones agreed in the successful Australia-United Kingdom free trade agreement signed in December 2022. Economic needs tests, including labour market tests, or other procedures of similar effect, should no longer be a condition for temporary entry of skilled workers between the two regions.
- One of the highest priorities for businesses, TMNP facilitates the temporary flow of skills and expertise, leads to greater productivity, fosters innovation, and enhances competitiveness – most particularly in knowledge-intensive sectors such as information technology and services. An essential component of a modern trade agreement, TMNP does not equal to permanent residency in another country. As its name indicates it is about short-term movement across borders to address specific business needs.
- Furthermore, to facilitate the movement of skilled workers and encourage greater harmonisation and standardisation across borders, the EU-Australia free trade agreement should also include ambitious provisions on the mutual recognition of qualifications.
- Gold standard provisions to capture the benefits of digital transformation
- Modern digital trade provisions should be incorporated in the EU-Australia free trade agreement to ensure that businesses and consumers can take advantage of the opportunities presented by the digital economy, where both the EU and Australia are major players. Digital trade reduces transaction costs, improves market access, and increases SME participation in global value chains, amongst many other benefits.
- E-commerce should be facilitated by ensuring the free flow of data to ensure businesses can operate online without facing unnecessary barriers or regulations. This is particularly important for businesses that operate across different jurisdictions, as they need to be able to transfer data between different locations in order to operate efficiently. Such provisions help promote innovation and productivity.
- The agreement should promote a secure and open digital economy by preventing unnecessary data localisation requirements, whilst also protecting the privacy and security of individuals and businesses by requiring high standards for personal data protection. Enhancing trust such provisions would help to create new opportunities for growth.
- By promoting greater regulatory coherence and cooperation, digital trade provisions will also help reduce the cost and complexity of complying with different regulatory frameworks across different markets.
Overall, a modern comprehensive and ambitious free trade agreement between the EU and Australia would enhance the quality of life for citizens, fuel investments that are critical for the green and digital transitions and generate economies of scale that incentivise innovation. Taking advantage of the current political alignment, negotiations should be concluded by mid-2023 to materialise, as soon as possible, the significant benefits a winning new bilateral framework will offer to both regions.
