TasFarmers Matters - Don't break out the prosecco

TasFarmers has been raising concerns since Australia rejected the proposed Australian–European Union (EU) Free Trade Agreement in 2023.

Negotiations had been under way since June 2018, and the deal carried real potential, with the EU representing a market of around 450 million people and a GDP of approximately $22–23 trillion.

However, after long and protracted negotiations, Australia’s position appears to have weakened, with Brussels gaining the upper hand. What is now on the table looks materially similar to what was rejected in 2023, with little to no substantive improvement for key agricultural commodities.

There have been some wins. Fisheries, for example, have secured tariff reductions of up to 26 per cent, including the removal of tariffs on Tasmanian abalone. But these gains are limited, and in some sectors, such as pork, the majority of product sold in Australia is already imported.

It could be argued that Australia’s interests have been compromised in what is a long-term agreement that cannot easily be unwound in the near to medium term. 

Other nations, such as New Zealand, appear to have negotiated more favourable outcomes for their farmers, placing a higher strategic value on agriculture. The question is, why couldn’t Australia achieve the same?

The EU has also pushed hard on geographical indications, seeking to restrict the use of common product names used by Australian producers. 

While Australia has secured the ability to retain some key terms such as parmesan and prosecco domestically, other names face phase-outs or restrictions.

This creates complexity, cost and uncertainty for producers, particularly where branding, packaging and market positioning may need to change over time. 

It also reinforces the broader issue that European producers continue to operate within a protected system, while Australian producers are being asked to adjust.

At its core, this agreement risks opening the door to greater volumes of imported product into Australia, without a commensurate increase in our access to European markets.

 It runs counter to the long-term sustainability of our agricultural sector, our food security, and our ability to remain self-sufficient.

Key issues remain unresolved. There is no meaningful lift in lamb or beef export quotas. In sectors such as potatoes, there is a real risk of low-cost products being dumped into the Australian market, undermining local production and eroding independence.

The lessons of Covid and the current fuel pressures are clear, Australia must retain the capacity to stand on its own feet. That means maintaining competitiveness and efficiency, while recognising there is a cost to resilience when global supply chains become fragile.

For consumers, this agreement may deliver cheaper goods in the short term.

But we have seen before, with the loss of our car industry, that cheaper imports can come at the expense of domestic manufacturing capability. 

Once that capacity is gone, it is rarely rebuilt.
The agreement also supports increased flows of goods, services and investment, particularly linked to the renewable energy transition.

Without balance, that risks becoming a one-way flow that weakens Australia’s productive base and limits our ability to build a vertically integrated renewable energy sector.

TasFarmers has always supported fair and free trade. But where trade is not fair, and where it compromises the long-term viability of our sector, we must question the fundamentals. Free-flowing trade alone is not enough, it must also deliver fairness, economic strength and sustainability.

The EU continues to provide around $80 billion annually in agricultural subsidies. 

That is a clear signal that protectionism remains alive and well. Australian farmers, by contrast, are among the lowest recipients of government support across the OECD.

Against that backdrop, it is fair to ask whether Australia has entered into an arrangement that is, in effect, anti-competitive and restrictive for our own producers, manufacturers and detrimental to Australian interests. 

At a time of global uncertainty, particularly across key markets such as the US and China, there was an opportunity for the Australian Government to secure stronger outcomes.

That opportunity appears to have been missed.