Farrell, who held lengthy meetings with EU trade commissioner Valdis Dombrovskis and agriculture commissioner Janusz Wojciechowski in Brussels on Monday and Tuesday, conceded there was “still a long way to go” and it could be tough to reach the mid-2023 timeline set by leaders of the respective governments.

“We will persevere and persist, as we’ve always done with our trade agreements,” Farrell said. “But we have been clear that a deal for a deal’s sake is not on the cards, and we will need commercially significant access in agriculture to make it worth our while.”

The Australia-EU trading relationship is Australia’s second largest, and the EU is Australia’s second largest destination for goods exports. However, a trade deficit of about $38 billion exists and the EU’s barriers to agricultural imports are notoriously prohibitive.

The average EU tariff on agricultural imports is 14.2 per cent which is much higher than the average tariff on non-agricultural products, which is just 4.2 per cent. Dairy faces the highest average tariff, at 32.3 per cent. Sugar and meat are not far behind, at 27 per cent and 19 per cent respectively.

The EU has not budged on demanding Australia remove geographical indicators from certain food products such as feta, parmesan and prosecco, which would essentially prevent domestic producers from using those names.

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European Commission President Ursula von der Leyen and German Chancellor Olaf Scholz have made the deal a priority for the bloc in its quest to cut the EU’s trade dependency on countries like Russia and other more autocratic regimes.

It would also fit into the bloc’s strategy to increase its geopolitical weight in the Indo-Pacific region and further its aim to diversify the EU’s supply of critical raw materials needed for a green economy transition, like lithium and cobalt.

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