Trade deal lifts Australian-EU ties

Date: 18/06/1998

By Mark Turner

TRADE Commissioner Sir Leon Brittan will sign Mutual Recognition Agreements with Australia covering two-way trade worth more than 4 billion ecu during a seven-day visit to the antipodes next week.

The MRAs, which cover goods from medical equipment and automotive parts to pharmaceuticals and low-voltage electrical equipment, could reduce manufacturing costs by as much as 30 million ecu, according to some estimates.

The signing ceremony will be largely a formality as the MRAs were initialled in 1996, but the European Commission claims that it will highlight a new advance in relations between the two continents which began with a wide-ranging political declaration last year.

Mirroring similar initiatives with the United States and Canada, the EU also intends to improve cooperation with Australia on consumer and competition policy, and to extend its science and technology agreement with the country.

Behind the festivities, however, will lurk a number of tensions as both continents profoundly reassess their positions in the run-up to the new millennium.

The EU faces a substantial overhaul of its agricultural policy as it prepares to enlarge to central and eastern Europe and a new round of world farm trade talks begins.

These developments are being watched closely by Canberra, which has long called for a more liberal EU farm regime and has already slammed the Commission's Agenda 2000 reform proposals as insufficient.

Australia's challenge is more cultural as it strives to find a new home and identity in the global market-place.

The past half decade of Australian policy has been marked by serious efforts to integrate with Asia, and to unshackle itself from its old European ties.

Yet recent events have thrown much of that into doubt. The Asian financial crisis has caused many to reassess the desirability of moving away from old markets, and the level of support for white supremacist firebrand Pauline Hanson in last week's Queensland elections highlighted the fears of many ordinary Australians.

Canberra diplomats are, however, keen to dispel any impression that Australia will become more inward-looking. “Our focus is even more tightly on Asia, given the troubles there,” insisted a government spokesman, who added that talks with Brittan on possible reactions to the crisis could be the most important aspect of the visit.

Nonetheless, Brittan's trip will leave little room for doubt that Europe is still Australia's pre-eminent ally.

Although trade with ASEAN nations plus Japan amounts to around 30&percent; of Australia's total trade, compared to only 18&percent; with Europe, bilateral links with the EU have actually been growing stronger over recent years.

Australian exports of merchandise such as wool, coal and iron ore to the Union grew by 13&percent; last year, compared to a 10&percent; increase in exports to the APEC economies. Underlining this, the two sides intend to renew a 1993 coal agreement during Brittan's visit.

In fact, despite disagreements over farm produce and wine, Australia and Europe look set to become unlikely allies during the next round of global trade talks.

“Both of us would prefer the next round to be a package of talks, whereas the US is pushing for a sector-by-sector approach,” said one Commission official. “We share the same goals.”