Governmental Affairs Update on Trade and Investment

Despite the COVID-19 related restrictions, the negotiations for the Australia-EU Free Trade Agreement continue.

Most businesses are impacted by the COVID-19 situation. The Chamber’s Governmental Affairs work over the last few weeks was focussed on sup porting German-Australian businesses when they were affected by new gov ernment regulations. One very important area in this is the Australian border closure and the difficulties in bringing necessary staff from some Australian States into other States or Territories. By collaborating with our governmental affairs contacts, we were able to understand the restrictions and the criteria for exemptions in great detail and were, therefore, able to support some bilateral businesses to overcome border restrictions when overcoming them was critical for their operation.

However, I need to say that we were unfortunately not able to support all bilateral companies that have contacted us due to the very strict criteria used for exemption approvals, especially in regards to bringing necessary specialist staff from Germany to Australia, even when they have an existing working visa for Australia. With the health situation further improving in Germany and Australia further, we are working with our government partners on ways to overcome the restrictions as soon as possible, especially for businesses where bringing German specialist staff is critical for the operation in Australia and therefore also for the employment of Australian staff.

Another aspect of the COVID-19 situation is the health sector, where we have worked with our member companies and the European Australian Business Council (EABC) to send a joint letter to Minister Greg Hunt and Minister Karen Andrews to demonstrate ways how the industry can help Australia better manage the situation and to be even better prepared in future. We expect to continue this discussion also during our upcoming Canberra Delegation 2020, scheduled for 9-11 November. Please contact me for further information and to secure one of the strictly limited participation spots.

In regards to the Australia-EU Free Trade Agreement (FTA), it was very positive to see that the seventh formal negotiations round took place as planned in May. Due to the travel restrictions, this round was the first one being conducted via videoconference from 4th to 20th May between Canberra and Brussels. Following the round, I had the opportunity to engage with both Chief Negotiators and both emphasised the progress being made. There is some way to go for the negotiations with the next full negotiation round scheduled for September and with a conclusion of the negotiations not before early 2021. One element that seems to have some impact on the Australia-EU FTA negotiations is the Brexit process. On the one hand, the EU-United Kingdom relationship is of fundamental importance for both sides, so it seems that a lot of attention and resources in Brussels are currently focussed on the UK / Brexit negotiations for the future relationship. On the other hand, the Australian government has publicly announced that it is committed to pursuing an ambitious and comprehensive FTA with the United Kingdom of Great Britain and Northern Ireland (UK). The formal negotiations between Australia and the UK started on 17 June 2020. This follows the establishment of a Joint Trade Working Group (TWG) in late 2016 to prepare the formal FTA negotiations. One element of the Brexit impact on the Australia-EU FTA negotiations seems to be on agriculture market access offers. For example, some reports about the Australia-EU negotiations say that the Australian side is unhappy with the proposed splitting of the historic beef import quote used between Australia and the EU-28 (the current EU member states and the UK) and now between Australia

and the UK as well as Australia and the EU-27. The splitting of the historic beef important quota has likely also an impact on the future beef import quote to be agreed under the Australia-EU FTA. This is just one example of a number of sectors and industries, including professional services and investments, where there is some impact of the Brexit negotiations on the AustraliaEU FTA negotiations. However, this impact should not be overstated and it is clear that there is very strong political support from the Australian government, including Australian State governments, for the Australia-EU FTA as there is also on the European Union side, where Commission President Ursula von der Leyen mentioned the Australia FTA in her opening speech and where major member countries such as Germany strongly support the Australia-EU FTA, both in terms of its very high symbolic value to support rules-based international trade and investments and its practical value for businesses, investors and consumers on both sides.

The German-Australian Chamber, together with our partners in the global AHK network and through our DIHK office in Brussels, will continue to advocate for a comprehensive Australia-EU FTA that addresses the key tariff and non-tariff trade barriers facing businesses, particularly SME businesses, on both sides.

Please get in touch if you want to discuss our work in this area or if you encounter a trade barrier that the Chamber could address.

Written by Dr Michael Zettinig, German-Australian Chamber Email:michael.zettinig@germany.org.au Phone: (02) 8296 0448