Australia tries to clear the air for sake of EU trade accord

Date: 08/02/1996

By Elizabeth Wise

DESPITE marching in the streets against one of the EU's member states for much of last year, Australians are now bidding for much closer cooperation with the Union.

If the Canberra government can overcome its distrust of the French government, whose nuclear tests in the South Pacific sparked a storm of protest across the Pacific region, and if Paris can forgive the Australians for the insults they hurled its way during the nuclear protests, the EU and the island continent may sew up a trade and cooperation agreement this year.

Trade Commissioner Sir Leon Brittan is careful to stress that the framework agreement will not lead to a free trade zone and does not even give Australia privileges on the EU market denied to other World Trade Organisation (WTO) members.

But even without any talk of lowering barriers, Australian goods - from car parts to wool - will have an easier time reaching European consumers if an agreement is struck, as they will face fewer regulatory and administrative challenges.

Agricultural goods are also targets for closer cooperation and might cause some French indigestion, given the success of Australian wine on European restaurant tables and a series of farming disputes which have soured relations between the EU and Canberra in the past.

These have, according to Australian Foreign Minister Gareth Evans, “made it difficult to develop full and confident relations with the European Union”.

Commission officials say their goal is to bring relations with Australia up to the level of those the Union has with other members of the Organisation for Economic Cooperation and Development (OECD).

New Zealand will be the next to receive an upgrade and the Commission, which is drafting a mandate for talks with Wellington, hopes an accord can come into effect this year.

Both initiatives are clearly geared towards solidifying Europe's position in the Pacific and serve as stepping stones towards the real land of milk and honey - Asia.

At a meeting with Evans last October, the then Spanish Foreign Minister Javier Solana said Australia would be vital to developing Asian ties.

Australia is selling itself as a bridge into the Orient. “We are now a very competitive country for basing regional headquarters for business and for investing,” said Australian parliamentarian Michael Beahan when he met Commission officials last autumn.

It is an argument which the Commission accepts. “Australia shouldn't worry about choosing Asia or Europe,” said one Brittan aide. “By choosing Asia, Australia will have better ties with Europe. Europe is also choosing Asia.”

EU leaders will demonstrate that choice next month at a Bangkok summit with their counterparts from ten Asian nations, many of whom are partners of the United States through membership of the Asia-Pacific Economic Cooperation (APEC) organisation.

Australia and New Zealand are also APEC members, but EU officials say they are not seeking to create a rival zone.

The framework accord envisioned by Brittan for Australia covers trade and economic cooperation, including provisions for customs, competition, energy, environmental matters, research, education and even the coordination of aid to developing nations. The range is roughly the same as that covered by EU-Canada relations and could in future be upgraded in the way ties between the Union and Ottawa are being strengthened now.

The accord, scheduled to last five years and renewable, would not cut tariffs or quotas, but would ease two-way trade through mutually recognised standards and certificates.

Commission officials say they do not expect great increases in imports and insist EU countries should not worry that Australian products will threaten European manufacturers.

Among EU member states, the UK is the biggest importer of Australian goods, followed by Germany. The two export roughly the same quantity of goods to the Pacific state.

The draft also proposes 'cooperation' in the domains of fisheries and agriculture. More than trade regimes, Commission officials say, that means research. “Agriculture will be the sore point in our relations,” admitted one, but added that the picture was not as bleak as usually depicted. World trade talks have resolved most of those bilateral disputes and have greatly eased tensions between the two.

Australia is currently in the midst of an election campaign, with just three weeks to go before polling and Keating trailing his rival John Howard. But Commission officials say the outcome of the 2 March elections is unlikely to affect Canberra's policy towards the EU because of the economic benefits Australia would gain from such an accord.

According to Commission figures, Australia is the eighth largest economy outside the EU. The Union is the second biggest consumer of Australian exports (3.9 billion ecu worth in 1994) and Australia's largest trading and investment partner.

Australia has had a rocky relationship with Europe since 1973. Having lost its biggest consumer almost overnight when the UK joined the EC and its Common Agricultural Policy, the island has been discontented ever since.

Former Prime Minister Bob Hawke and the then Commission President Jacques Delors helped develop warm relations in 1986, but agricultural disputes have intervened regularly to cool things down.

A more positive note was struck once more, however, when current Commission President Jacques Santer and Austrian Premier Paul Keating pledged friendship last April.

The new warmth prompted Evans to declare last October: “We have entered a new era in relations with the European Union.”

But the French nuclear tests off Muraroa forced Evans to temper his accolades. “There's a very strong sense of resentment, outrage and betrayal against France, in particular,” he said.

EU officials prefer Beahan's view that anger over bomb testing has not damaged ties with the Union as a whole. But even his optimism is guarded, for he added: “At least we are hoping that it hasn't.”

Brittan, who plans to travel to Australia and New Zealand in June, will find out for himself.