Permanent Mission of the European Union to
the World Trade Organization (WTO)

EU Statement at the Trade Policy Review of Australia, 11 and 13 March 2020

Geneva, 11/03/2020 - 00:00, UNIQUE ID: 200311_10
Local Statements

The European Union would like to express its appreciation to the Delegation of Australia, led by Mr George Mina (First Assistant Secretary, Office of Trade Negotiations), travelling all the way from Australia for this 8th TPR. The EU would also like to thank the WTO Secretariat and the Government of Australia for their respective reports and the Discussant, Ambassador Julian Braithwaite, for his remarks. Due to the emergency situation on Coronavirus this meeting takes place in a virtual manner, but we encourage all Members to make the best of it even under these exceptional circumstances.

I would like to start by applauding Australia’s record of 28 years of continuous economic growth, which is the result of successful economic policies combined with the fostering of an outward-looking economy. Like everyone here, the EU still has in mind the dramatic bushfires that have been exceptional in terms of intensity, duration and impact on the populations concerned. The EU showed full solidarity with those affected and offered its assistance. The fact that the fires had only a limited impact on the Australian economy should not hide that climate change is likely to be a much more challenging issue for Australia’s drought-affected areas over the longer run.

The EU is ready to increase cooperation with Australia on climate change. The EU-Australia Framework Agreement that we signed in 2017 contains sustainable development provisions, including on crucial climate topics. The EU also notes that Australia is currently investing in various renewable energy projects, which we strongly support. In our current bilateral FTA negotiations, we are also attaching great importance to the sustainable development chapter, as colleagues here are well aware since we had our own TPR last month.

During the review period, the Australian economy continued to internationalize. The Australian Government has sought to strengthen the overall performance of the economy through a range of reforms and regulatory changes. These include increasing infrastructure investment, reforming the regulatory environment and a plan for the development of the digital economy. The EU welcomes these sound macroeconomic policies and structural reforms. As acknowledged in the Secretariat report, trade policy in Australia is founded on a broad understanding that international trade and investment are critical to the economy, providing jobs and prosperity. The EU and Australia are like-minded on trade policy in this regard, providing for a sound basis for our relationship.

The EU and Australia are long-standing partners with increasingly important commercial ties. The EU is currently Australia’s third largest trading partner (after UK’s withdrawal from the EU) and the second biggest investor in terms of Foreign Direct Investment. In 2018, the value of total trade between the EU and Australia amounted to almost €48 Bn. The EU represented 12.8% of Australia's goods and services trade.  

I also wish to convey the EU's appreciation for Australia's significant contribution to the multilateral trading system. The EU and Australia share the deep concerns about the crisis in the WTO and converge on the need to reform the Organisation  to address the root causes of today’s trade tensions and fill the gaps in the rule book. The EU and Australia have an excellent cooperation on the various ongoing plurilateral initiatives and we are working together in the Ottawa Group and towards the Multi-Party Interim Arrangement. We would also like to congratulate Australia for its accession to the WTO Government Procurement Agreement on 5 May 2019.

Mister Chairman, despite of Australia's positive record, I would like to refer to some of issues of concern in the EU questions submitted for this TPR that we find particularly important.

First, the EU has concerns in the area of taxation. Several EU Member States do not yet benefit from Double Taxation Agreements with Australia. The absence of such agreements limits trade opportunities and would also limit the benefits of the Free Trade Agreement that we are currently negotiating, including for the EU Member States affected.

The EU also continues to be concerned about the Australian Luxury Car Tax, which puts the EU car exporters at a clear disadvantage. The proliferation of similar taxes at the state level in Australia adds to these concerns. Furthermore, the lack of a level playing field resulting from the application of the Australian Wine Equalization Tax remains a matter of concern. We also hope that Australia will soon comply with recommendations from the OECD forum on harmful tax practices and reform its Offshore Banking Units fiscal regime.

In the area of investment, the Australian Government applies wide grounds for the screening of foreign direct investment going beyond “national security”. This screening and its thresholds continue to put EU investors at a disadvantage in comparison to investors of several other third countries.

Mister Chairman, to conclude on a positive note, the EU appreciates the transparency of Australia's trade policies and welcomes that Australia chose the alternative timeline for its review, which allowed us to get their replies in a timely manner in advance of the meeting. If we have any comments on the replies provided, we may express them on Friday. We wish Australia an excellent review.

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