EU Postpones Free Trade Talks With Australia for 2nd Time

By Daniel Y. Teng
Daniel Y. Teng
Daniel Y. Teng
October 24, 2021 Updated: October 25, 2021

The European Union (EU) have delayed trade talks with Australia again amid ongoing displeasure from the French government at the surprise announcement of the AUKUS deal, which saw Australia cancel an AU$90 billion (US$64 billion) submarine project.

Australian Trade Minister Dan Tehan revealed that the 12th round of talks with the EU had been postponed for a second time this month.

The talks were initially scheduled for October but were first pushed out until November and now will be delayed a further three months until February 2022.

“The European Union have advised the Australian government that Round 12 of the FTA negotiations will now take place in February,” Tehan said in a statement to Reuters.

November is also a busy month in the diplomatic calendar, with the COP26 conference due in Scotland, which has seen the Australian government weather increasing pressure from foreign governments and legacy media to take more action on climate change.

The fallout from the AUKUS deal has dominated headlines in recent weeks, with France even withdrawing its ambassadors from Australia and the United States after the government’s decision to sever the troubled Future Submarines Project with the French defence contractor, Naval Group, was announced.

The original 2016 plan was for Naval to convert 12 of its Barracuda-class nuclear submarines into diesel-electric powered Attack-class submarines fitted with U.S. weapons systems.

However, the ambitious project has been riddled with ongoing delays and cost blowouts from original estimates of AU$10 billion to AU$89.7 billion. Australian Prime Minister Scott Morrison estimated AU$2.4 billion (US$1.7 billion) had already been sunk into the project before construction had begun.

The AUKUS deal would see Australia look to explore the acquisition of eight nuclear-powered submarines from the United States or the United Kingdom.

French ministers reacted angrily to the announcement, accusing Australia and the United States of “stabbing it in the back” and recalling its ambassadors from Canberra and Washington D.C.

European Commission President Ursula von der Leyen also questioned whether the incident could affect a potential trade deal with Australia.

Australia was hoping a trade deal with the EU would give its exporters access to a market of 450 million people and cuts to tariffs protecting the trade bloc.