Australian Liberals split over EU trade deal as Coalition position remains unsettled

Traders Union
All News
Geopolitics & Trade
Liberals split over EU trade deal

Highlights

Senior Liberals state the Coalition has not formally opposed the Australia-EU trade deal, with the decision pending parliamentary committee scrutiny and party discussions.
Trade Minister Don Farrell maintains the agreement is finalized with no scope for renegotiation, despite internal Coalition divisions and some calls for amendments before legal ratification in 2024.
The deal expands market access for Australian beef, sheep meat, fruit, vegetables, and seafood exports, prompting business and EU diplomatic pressure for ratification despite mixed industry satisfaction.

Coalition process and deal timeline

As reported by ABC News, several senior Liberals say the party has not formally agreed to oppose the Australia-EU trade deal, despite Nationals leader Matt Canavan arguing that both Coalition parties are against it. They say the issue has not yet gone to shadow cabinet or the Coalition party room and can only be considered after scrutiny by parliament's joint standing committee on trade.

Canavan wrote in The Australian that the agreement negotiated by Trade Minister Don Farrell would weaken Australia's sovereignty on climate policy and hurt the steel industry and some farmers. His colleague Bridget McKenzie also says the Coalition is united, but two Liberal senators tell ABC the proposal is preferable to the status quo and should be supported unless it becomes a very poor agreement.

Some Liberals argue there is still time to seek changes because, although leaders agree the text this year, the deal is not signed until Australia and each EU member state complete legal checks, most likely early next year. Farrell rejects that view, saying there is no room to reopen the talks and that the agreement is finished, while Canavan later uses narrower language, saying the opposition is against the deal in its current form.

Senate arithmetic and business pressure

Farrell says he is confident the Senate will not block the agreement, even though the government does not control enough votes on its own. That leaves open the prospect that some Liberals ultimately support the deal, although none of those cited by ABC indicates a willingness to cross the floor at this stage.

European diplomats are also pressing the economic and diplomatic case for ratification. One diplomat from an EU country tells ABC it would be very damaging if Australia fails to approve the pact and echoes the government's position that there is no appetite in Europe to revisit the negotiated terms.

The agreement expands access to the European market for Australian beef and sheep meat exporters, though not as much as those industries seek, and also secures access for Australian fruit, vegetables and seafood. Industry and Innovation Positions Minister Tim Ayres says backing the pact is a test of the Coalition's economic credibility, while the Australian Chamber of Commerce and Industry supports ratification even though it does not consider the deal perfect.

In our earlier article on how conflicts are reshaping global trade, we described the WTO’s warning that wars and tariff shocks are pushing companies to redesign supply chains and shipping routes in ways that could outlast the current crises. We also noted the expectation that regional trade and new trade agreements will keep expanding as countries and businesses seek more resilient, diversified trade links despite higher costs and persistent uncertainty.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.