Introduction

The second round of negotiations on the Australia-EU FTA was held in Canberra on 19-23 November. The Australian delegation was led by the Department of Foreign Affairs and Trade, and included representatives from 17 other government agencies. The EU delegation was led by a Deputy Director-General for Trade.

We made further progress across the FTA in a positive atmosphere. We had useful discussions on goods and market access, including modalities and ambition for initial offers, and on services and investment. Australia presented its proposals on professional services and customs trade facilitation. Australia and the EU agreed to chapter text provisions in a number of areas of the negotiations. The third round of negotiations will be held in March 2019.

The Australia and EU Chief Negotiators hosted a joint stakeholder briefing during the round, which was attended by registered stakeholders from across peak bodies, business, industry groups and civil society. Chief Negotiators provided an update on the progress of negotiations. Stakeholders were able to ask questions on any aspect of the FTA. The discussion covered a broad range of issues, ranging from transparency, market access, intellectual property, taxation, customs, dispute settlement and review mechanisms, animal welfare and environmental protection.

Trade in Goods

We made strong progress on a number of provisions in the Trade in Goods chapter, with many articles of text now agreed. Australia and the EU also held further detailed and useful discussions on market access for goods, including the establishment of 'benchmarks' for initial offers.

Rules of Origin

Australia and the EU made steady progress during their first in-depth Rules of Origin text discussions. We agreed on a number of articles in principle, and on a way forward to exchange and discuss Product Specific Rules at following rounds.

Customs and Trade Facilitation

Australia presented its proposal on customs trade facilitation – a mutual recognition arrangement for authorised economic operators. We discussed chapter text proposals shared since the first round, agreeing on some provisions. We also agreed to exchange further proposals on outstanding text ahead of the third round.

Mutual Administrative Assistance in Customs Matters

Australia and the EU held our first detailed discussions on the Protocol on Mutual Administrative Assistance in Customs Matters, which will provide a basis for cooperation between customs authorities. The atmosphere was constructive and several articles of the text were agreed.

Trade Remedies

The EU and Australia discussed the EU's proposed text on trade remedies. We discussed our differences in approach and our different systems, at this early stage.

State-owned enterprises

Good progress was made on the State-Owned Enterprises chapter, which saw some text agreed. Both sides agreed to continue discussions on some definitions and the scope of the chapter.

Competition and Subsidies

We have similar views on provisions related to competition, and discussed the scope of the subsidies chapter.

Government Procurement

We continued to deepen our understanding of each other's procurement frameworks and existing commitments. We focused on how to achieve transparent and competitive access to government procurement opportunities for each other's suppliers.

Technical Barriers to Trade

We made good progress on the chapter on technical barriers to trade, with some provisions agreed in the articles on standards, conformity assessment and transparency, among others. We held our first in-depth discussion on the EU's annexes related to supplier declarations of conformity and automotive regulations, during which Australia asked questions about the EU's proposal.

Services and Investment

The EU presented its proposed Investment Liberalisation and Trade in Services text, with dedicated discussions on cross-border trade in services, financial services, entry and temporary stay, domestic regulation, professional services and telecommunication services. Australia indicated areas of convergence with our own practice where we could likely accept EU text, and others that would require further analysis or consultation. Australia presented a proposal on professional services, including elements relating to market access and the recognition of professional qualifications. We had preliminary discussions regarding services and investment market access.

Our discussions on Investment Liberalisation and Capital Movements were based on text proposals made by the EU prior to the round. The EU provided background information on its proposals, and Australia noted areas where the proposals were consistent with its recent practice. Australia signalled areas where we could accept the EU's proposals between rounds and issues that would require consideration. Australia also noted we would consider making additional text proposals prior to the next round.

The two sides discussed our respective e-commerce/digital trade texts. Both texts contain disciplines on key e-commerce issues like e-authentication, non-imposition of customs duties, data localisation, protection of personal information, prevention of unsolicited electronic messages, source code and cooperation. There are differences, however, on the scope and/or detail of a number of the disciplines. Both sides agreed that the texts would be merged into one document for the next round.

Intellectual Property

Australia and the EU continued Intellectual Property chapter discussions. Both sides provided further explanation of our respective approaches to the chapter, with a particular focus on exploring areas of shared interest. Discussions covered all areas of the prospective chapter, including copyright and related rights, designs, patents, trademarks, geographical indications, plant varieties, undisclosed information (including trade secrets) and enforcement of intellectual property rights, facilitated by experts from relevant policy areas. Ahead of the next round, both sides agreed to consider further, possible areas of convergence.

SPS and Animal Welfare

This was the first time that we were able to discuss text proposals and explain each other's respective approaches to the SPS chapter and to possible provisions on animal welfare. EU and Australian negotiators and technical experts exchanged information on each Party's systems for biosecurity protection, animal, plant and human health, food safety and animal welfare. The discussion was open and very constructive, and both the EU and Australia will be reviewing and developing possible text proposals for discussion at Round 3 to reflect our better understanding of each other's systems and approaches.

Trade and Sustainable Development

Both sides discussed our respective FTA precedents and practices for commitments on labour and the environment consistent with internationally agreed principles, standards and rules. We discussed in general terms possible issues to be included in a future text. On labour issues, we covered labour standards, decent work, the fundamental ILO Conventions, and potential areas for cooperation. On environmental protection, we discussed multilateral environment agreements, including climate change, conservation and trade, biodiversity and environmental goods and services. Australia presented on implementation of the Sustainable Development Goals and sustainable forestry and trade. Both sides discussed institutional provisions and dispute settlement.

Energy and Raw Materials

Australia and the EU discussed the EU's proposed provisions on Energy and Raw Materials. Both sides provided further information about our respective regulatory systems, and Australia explained the multi-jurisdictional regulation of energy markets and certain raw materials in Australia.

Dispute Settlement

Australia and the EU had a detailed discussion of Australia's responses to the EU's proposed Dispute Settlement chapter. We reached broad agreement on the dispute settlement process established by the chapter, subject to further discussions on certain rules and procedures (such as timeframes, panellist expertise requirements and non-violation claims) and the EU's proposed mediation mechanism.

Transparency and Good Regulatory Practices

Australia and the EU had our first discussion of the EU's proposed Transparency and Good Regulatory Practices (GRP) chapters. We noted our common practices in these areas, but also discussed the need to ensure that the chapters reflect our respective regulatory practices