MEPs back FTA negotiations with Australia and New Zealand

In another move that aims to increase the EU’s leverage on the global market, MEPs last week backed the opening of trade talks with Australia and New Zealand with an overwhelming majority. The only opposition came from the (far) left and the extreme right amid concerns over globalisation. Agriculture and transparency remain thorny issues, however.

This FTA adds one more link to the global trade network that the EU is building and which includes similar deals with the US (TTIP), Canada (CETA), Japan, alongside the already completed FTA with South Korea, and the TiSA (Trade in Services Agreement).

A majority of MEPs, which included a broad coalition of the S&D (social democrats), ALDE (liberals), EPP (Christian democrats), ECR (conservatives) and the eurosceptic EFDD (Europeans for Freedom and Direct Democracy), backed a resolution outlining the Parliaments stance on the opening of Free Trade negotiations with Australia and New Zealand. The Greens and GUE-NGL (the radical left) opposed alongside the far right ENF group. The MEPs stuck close to party voting lines, with mainly the EFDD having abstentions from British members of the UK Independence Party.

At the end of last year, Australian Prime Minister Malcolm Turnbull gained the support of German chancellor Angela Merkel on working towards a trade deal. Subsequently, a timeline of the negotiations was worked out together with the European Commission.[1] New Zealand followed a similar timeline, with joint communications between John Key, the New Zealand Prime Minister, and the European Council and Commission presidents at the end of October calling for a free trade agreement (FTA).[2]

Although the parliament only voted on a non-binding resolution voicing their approval for the start of the trade talks, the large majority is nonetheless important. A final FTA does need final approval from the European Parliament, while there are also some directives[3] needed to translate the FTA into law, an area where the EP can also use its sway. The final deals are not expected before 2017.[4]

The EU’s Member States, who define the Commission’s negotiation mandate, must notice of the content of the resolution. MEPs stressed multiple points during the parliamentarian debate, especially concerning the importance of concluding a deal quickly while being wary of provisions on agriculture. Bernd Lange (S&D), the main rapporteur on the resolution, stated: “It is logical for us to go down this path. We have a close value relationship with Australia and New-Zealand, as well as the same economic structures.” Lange wanted a more ambitious deal than the TTIP that is still in the works, “although we need closer analysis and more transparency.” [5]

The so-called TTIP or Transatlantic Trade and Investment Partnership are the EU free trade negotiations with the US. They are clearly on parliamentarians’ minds. Those negotiations came under heavy criticism last year, after highly public protests by civil society and NGO’s. MEPs thereafter backed a resolution calling for more transparency in the negotiations as well as a reform of the Investor-State Dispute Settlement (ISDS) system, which would have allowed companies to challenge states they deem have broken trade rules in court.[6] This resolution later forced the Commission to backtrack somewhat in their negotiations. The Parliament’s next moves on trade are thus watched keenly, especially by Cecilia Malmström, the European Commissioner for Trade.

Nevertheless, opposition to the resolution by the (radical) leftists of GUE-NGL and the Greens seemed more based on ideological concerns. Lola Sanchez-Caldenty of GUE-NGL called the urges for new FTA’s a dogma. “We need to see clear benefits for workers and the environment. But you are not worried about that, since you work on account of the multinationals. Free Trade yes, but not at any price”, she signalled to her colleagues. The Greens focused their opposition on agriculture, with Maria Heubuch calling the resolution “petrol on the fire.” “Dairy and agriculture should be at the heart of the discussion, and we cannot find this in the text,” she said. [7]

The majority, however, agreed that Australia and New Zealand have been overlooked despite having the same economic and political values as the EU. A free trade deal seems imperative. Despite this agreement, there was some discussion on the speed and the way in which the deal should be tackled. Emma McClarkin of the ECR called for “an ambitious trade deal that is bold enough to tackle modern challenges, with special attention for SMEs.” Deputies of the liberal ALDE and the centre-right EPP agreed, saying a deal could be reached relatively quickly. The centre left was quick to caution however, with Karoline Graswander-Hainz (S&D) saying: “An agreement should be an advancement for our citizens, we expect jobs & growth. A sustainable agreement is paramount, European standards cannot be cut.” Her fellow party member, Emmanuel Maurel (S&D), again stressed the need to protect farmers. “We need to proceed with caution, as we have different trading cultures here than in Australia and New Zealand.” Ashworth of the ECR called that “overstated” and pointed to close historical and cultural ties that necessitated a quick agreement. [8]

For now, these disagreements have not prevented the parties from supporting the resolution, but the Commission will have to tread a fine line between the demands for speed and thoroughness, or risk to lose some support in the European Parliament.