Bangkok It is an unusually complex situation that Australia’s Trade Minister Dan Tehan has found himself in for a few days. In view of the dispute over the failed submarine deal with France, doubts are growing in the European Union about the long-planned free trade agreement with the G20 country. At the same time, China is now trying to present itself to the government in Canberra as a reliable trading partner – despite massive conflicts between the two countries.
“Obviously there are significant disappointments right now,” Tehan told Australian broadcaster ABC. What is meant are angry reactions from Paris to the decision of his government to build a submarine fleet together with the USA instead of buying it – as planned – from France for almost 60 billion euros. But he was confident that the dispute would not spill over to trade policy, he added on Monday.
At this point, however, clear signals had already come from France, which indicated a bumpy path for the next round of negotiations in the free trade talks: European Minister Clément Beaune was the most clear. “Keeping his word is a basic condition for trust between allies,” he told the news portal “Politico”. “It is therefore unthinkable to continue the trade talks as if nothing had happened – with a country that we no longer trust.”
China poses as a constructive partner
For China, the dispute between the western states comes at a very favorable time: at the end of last week, the government in Beijing officially submitted its application for membership in the transpacific free trade pact CPTPP. This happened a few hours after the US, UK and Australia unveiled their new security partnership called Aukus – the spark that sparked the conflict with France. CPTPP was originally promoted by the USA in order to create an antipole to China’s economic power. After the departure of the Americans under Donald Trump, eleven states – including Australia, Japan and Canada – implemented the agreement on their own.
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Despite the low chances of an early admission, the government in Beijing is now using its membership application as an opportunity to present itself as a constructive partner: “China is a staunch advocate of trade liberalization,” said Foreign Office spokesman Zhao Lijian. “Our application to join the CPTPP shows once again China’s firm determination to promote regional economic cooperation.”
For Australia, China is currently the most important trading partner. With a trade volume of 36 billion euros last year, the EU ranks third behind Japan. A successful conclusion of the free trade talks started in 2018 could expand trade by around a third, according to estimates by the EU Commission. The next round of negotiations between representatives of the EU and Australia is scheduled for mid-October. “This is the current state of affairs,” said a spokesman for the EU Commission. “We are analyzing the impact that the announcement of Aukus would have on this schedule.”
France’s Ambassador to Australia, Jean-Pierre Thébault, who was called back to Paris over the weekend as a sign of protest, denied that his country was actively trying to torpedo trade talks. In an interview with ABC, he pointed out that the negotiations were a matter for the Commission.
“Australia should have every reason to want to reach an agreement with the EU.”
(Photo: AP)
At the same time he made it clear that he now sees Australia primarily as responsible for bringing the talks to a successful conclusion: “The EU is the largest market in which Australia is currently not as present as it could be,” he said . “Australia should have every reason to want to reach an agreement with the EU.”
Australia’s trade minister is trying to limit the damage
Bernd Lange, the chairman of the EU Parliament’s trade committee, indicated that this could now possibly be more difficult for Australia than originally assumed: “Europe’s willingness to compromise has now certainly decreased,” said the SPD politician. “The submarine project was not just a French project, it was a European one: many European companies are involved. So that’s quite a political sign that has to be digested. ”That’s why the negotiations can no longer be expected to be concluded very quickly, said Lange.
The negotiations would certainly not be suspended. Apart from the fact that the EU Commission already has the negotiating mandate, this also does not correspond to the will of the other member states.
The government in Canberra is already expecting delays, according to Australian diplomatic circles. Australia originally hoped that the talks would be concluded in the coming year.
Australian Trade Minister Tehan wants to personally take care of damage limitation during a visit to Paris in the coming weeks. His trip to the French capital had been planned for a long time because of a ministerial meeting of the OECD countries that was scheduled there. On the occasion he wants to discuss the commercial consequences of the submarine conflict with French government representatives. “I’m really looking forward to exchanging ideas with my counterpart,” said Tehan.
The appointment calendar of the politician, who has headed the trade department in Scott Morrison’s cabinet for only nine months, could also be much fuller in the future with a view to China. There has been no official government-level exchange between the two countries since the dispute over Australia’s demand for an independent investigation into coronavirus origins in Wuhan.
A letter that Tehan sent to his Chinese counterpart Wang Wentao at the beginning of the year has also still not been answered. Given China’s bid to join the CPTPP, which Australia would have to agree to like all other members, Tehan noted that face-to-face talks were essential.
The work of convincing China’s government is unlikely to be easy: From Australia’s point of view, it would first have to get rid of the existing trade conflicts – Beijing recently introduced import restrictions for Australian wine, among other things. In addition, the Communist Party would have to make credible that it would actually adhere to the strict CPTPP rules, for example with a view to fair competition with state-owned companies. Tehan said that China’s previous compliance with international trade rules will be used to assess the situation.
Collaboration: Eva Fischer, Torsten Riecke
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