News from the Institute for International Trade

The Long and Twisting Road to a Trade Agreement between Australia and the European Union

WORKING PAPER 20 This working paper explores the complex historical and economic relationship between Australia and the European Union (EU), focusing on the challenges in establishing a modern bilateral trade agreement. Although Australia and the EU have shared views on advancing global trade law beyond outdated WTO standards, formal trade negotiations only began in 2017, with several setbacks, including a major collapse in 2021. The paper traces key reasons for this friction, including Australia's strong historical ties with the UK, fluctuating relations with France, and limited engagement from other EU member states. Despite the convergence in trade policies and increased economic ties, factors such as disputes over agricultural access, the geopolitical implications of alliances like AUKUS, and sensitive issues around geographical indicators (e.g., Prosecco and feta) continue to stall progress. This paper underscores that while a trade agreement could yield mutual economic benefits, overcoming entrenched interests and political complexities will be essential for future collaboration.

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