Australian free trade negotiations with the European Union (EU) and Australia have failed during G7 trade ministers meeting in Japan, with the battle over prosecco being a major sticking point.
Australia wants greater trade access for beef, lamb, sugar, cheese and rice exports into the EU, while Europe wants Australian producers to give up the use of terms such as prosecco, mozzarella, feta and parmesan. The EU claims they are geographical indicators and their use should be restricted to products originating from the specific regions.
However, they have been unable to come to an agreement, meaning Australian prosecco producers will not be forced to relinquish the product name.
Australian Trade Minister Don Farrell said: “I came to Osaka with the intention to finalise a free trade agreement with the European Union.
“Since I became Trade Minister, I have been to Europe three times to progress a deal that benefits Australia’s national interest.
“My job as Australia’s Trade Minister is to get the best deal that we can for our producers, our businesses, our workers, and our consumers.
“Unfortunately we have not been able to make progress.
“Negotiations will continue, and I am hopeful that one day we will sign a deal that benefits both Australia and our European friends.”
The EU is one of the few markets that doesn’t have a free trade agreement with Australia. As a result, it imposes strict quotas and high tariffs on Australian agricultural imports.
Shadow Trade Minister Kevin Hogan said that while it was “disappointing” that negotiations had failed, but “the offer for agriculture, particularly beef, sheep and sugar, was not good enough”.
“The EU offer on geographical indicators would have also been too restrictive, particularly for products like parmesan, feta and prosecco,” he said.
It may be another two years before the discussion goes back on the table.
Industry commends Federal Government for EU stance
There’s a lot at stake in the fight for Australian prosecco. The total value of Australian prosecco production in Australia has grown from just over $60 million in 2017 to an estimated $205 million in 2021.
Around 95% of this is currently sold on the Australian domestic market.
Twenty regions growing the variety, with the majority of production concentrated in Victoria’s King Valley and Murray Valley.
In the King Valley, the prosecco industry is underpinning regional employment, economic growth and tourism. Being prevented from using the name prosecco on their products would have a devastating impact on the industry.
Australian Grape & Wine Chief Executive Lee McLean said: “We commend the resolve of Trade Minister Don Farrell in walking away from a free trade deal that was not in the best interests of Australian prosecco producers. The Government has made the right decision.
“We are fully supportive of the Australian Government’s decision to step away from ongoing negotiations rather than accept a deal that is not in the interest of Australian prosecco producers or the broader agricultural sector.
“Any outcome that sought to reduce our existing market access would be detrimental to our burgeoning prosecco industry and contrary to the intent of a free trade agreement which seeks to increase market access and remove trade barriers. Australian prosecco producers just want to retain the right to use “prosecco” as a grape variety in both our domestic and international markets.
“We commend the unwavering efforts of Minister Farrell, Minister Watt, the Department of Agriculture, Fisheries and Forestry, and the experienced team of negotiators from the Department of Foreign Affairs and Trade who have tirelessly dedicated themselves to these negotiations. We encourage their continued dialogue with the EU to seek a mutually beneficial solution that will enhance opportunities for both European and Australian markets.”
Fourth Generation Brown family member and Brown Brothers winemaker Katherine Brown said: “Keeping the Prosecco name means so much for the wine industry, we can continue to innovate and work with new varieties. This is big for all of the Australian wine industry, its not just about prosecco, its about all the wonderful varieties we get to work with now and in the future.”
“We say that you don’t need a celebration to open a bottle of prosecco, but today is a day when it is time to celebrate… with prosecco of course!”