Statement from Innes Willox, Chief Executive of the national employer association, Australian Industry Group
The signing of the Australia-European Union Free Trade Agreement today is a welcome boost to big parts of the Australian economy at a time when global trade is under severe stress driven by geopolitics, wars and heavily disrupted supply chains.
There have been many faltering efforts to conclude an agreement between the two economies, with this negotiation taking nearly eight years to conclude. This attests to the complexity of the economic relationship, the negotiations and strong interests and views on both sides.
The Federal Government deserves recognition for pursuing an agreement over the past four years, including at times being prepared to walk away when a proposed outcome was clearly not in Australia's broader interest.
As with all free trade agreements, not every sector of the Australian economy will be judged to be winners or beneficiaries of the deal. This is the reality of international negotiations, but the conclusion of the negotiations is in itself a positive outcome.
The current disruptions linked to the conflict in Iran highlight the risks of concentrated trade routes, energy exposure and limited market optionality. This comes on top of major disruptions caused by the Russia-Ukraine war and the rewriting of global trade norms by the United States administration, and follows the upheaval driven by the closure of national borders in response to the Covid outbreak.
Australian Industry Group has consistently argued that concluding an ambitious Australia–EU Free Trade Agreement would materially strengthen supply chain resilience by diversifying export markets, improving access to a large, high income economy and reducing reliance on vulnerable routes and inputs.
In a period of heightened geopolitical risk, the agreement should be seen as a strategic tool to improve market access, lower input costs and support more resilient and predictable supply chains for Australian industry.
The significant wins on movement of people and opening up industrial product markets are critical building blocks towards ensuring the benefits are as broad as they are deep.
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