Dan Tehan says EU free-trade negotiations are ‘business as usual’ despite tensions with France

The federal trade minister, Dan Teh, insists Australia’s free-trade agreement negotiations with the European Union are “business as usual”, despite growing unease over Australia’s treatment of France during the finalisation of the Aukus deal.

Tehan’s trip to Europe early next month will now be partly spent trying to smooth over tensions with the European Commission which has asked for a “please explain” over Australia’s dealings with its key member state France, in both cancelling a $90bn submarine contract, and entering into a strategic Indo-Pacific agreement which excludes Europe.

In a speech to the National Press Club to be delivered early Wednesday afternoon, Tehan will offer an attempt at peace before crucial talks with Australia’s second largest trading partner, and will announce an offer on key geographical indications.

“FTA negotiations are always tough and hard-fought, but we have made substantial progress during rounds 10 en 11 of negotiations,” Tehan said in a speech excerpt released before his appearance.

“Key areas of the negotiations have been moving positively, including on market access for goods, services and investment, and in areas of particular interest for the EU, such as geographical indications.

"In werklikheid, as a demonstration of the business as usual approach we continue to take, I have just signed off on our GI offer so our negotiators can discuss it with the EU over the coming days.”

A geographical indication identifies goods as being produced in particular regions, and the EU has been fighting for its member states to have more control over trademarks for traditional products.

Australian exporters have been pushing back, particularly over products such as prosecco, which the EU wants to rename glera if produced anywhere other than the north-east region of Italy.

It’s not yet known whether an offer to rename any Australian produced feta to salty white crumbly cheese is on the table, or if any offer would be enough to calm the European Commission, which has been asked by France to “reconsider” Australia’s inclusion in any free-trade deal.

The chair of the European parliament’s committee on International Trade, Bernd Lange, said he expected to see “some kind of apology, some kind of de-escalation of the situation, from the Australian government” over its handling of the French submarine contract, and the Aukus announcement.

“The question of trust is now occurring, and some members could ask for more safety nets, for more safeguards,” Lange told ABC radio on Tuesday.

In his speech, Tehan will say it was in the EU’s interests to enter into a free-trade agreement with Australia.

“The EU will use it as a way to strengthen its engagement with the Indo-Pacific because they realise that the region carries the economic weight of the world,” the draft reads.

“When I was in Europa in May visiting Germany, Belgium and France I heard one common refrain, if Europe can’t negotiate a FTA with Australia, who in the Indo-Pacific could they negotiate one with?”

He also expects the French to come around.

“For the French, who export $6.17bn in goods and services to Australia while we send $1.37bn the other way – a comprehensive FTA is very much in their interest. It would see our economic partnership grow even further.”

“We have a strong relationship with the EU, built on our shared commitment to democracy, human rights, the rule of law and economic openness.

“And the sign of a healthy relationship is the ability to sit down and discuss issues face-to-face and, where necessary, to have difficult conversations.”

The EU is not the only pressing trade issue Australia is dealing with. China has issued its formal application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free-trade agreement between Australia, Brunei Darussalam, Kanada, Chile, Japan, Malaysia, Mexiko, Peru, Nieu-Seeland, Singapore and Vietnam.

The move is thought to be part of China’s strategic push to increase its influence in international trade rule making. Australia is opposing China’s entry into the agreement, until it agrees to stop its existing trade strikes against Australia.

Tehan’s said any existing member of the CPTPP would want to be confident that any new member will meet, implement and adhere to the high standards of the agreement as well as to their World Trade Organization commitments and their existing trade agreements.

“It’s in everyone’s interests that everyone plays by the rules,” he is expected to say.

China has previously expressed its displeasure with Australian decisions by either refusing or issuing tariffs on Australian products already subject to trade deals, while leaving Australian ministers out in the cold for discussions.

That’s something Tehan takes issue with in his speech, saying any attempts by China’s government to enter into the CPTPP pack would mean “you have to be able to sit down, look your economic partner in the eye, and talk about that accession process”.

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