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Updated April 07, 2017 08:26:53

The Federal Government hopes to begin negotiations for a free trade agreement (FTA) with the European Union in the second half of this year, after finalising a key step needed to begin talks.

Trade Minister Steven Ciobo has finished a scoping study that sets out the boundaries for future talks.

"The EU is our second-largest trading partner, it's worth roughly $95.6 billion and putting this FTA in place will be crucial driver of the Australian economy into the future, and of generating more jobs in Australia," he told AM.

Mr Ciobo will now seek a mandate from Cabinet to begin formal negotiations for the FTA, but he would not put a timeframe on the conclusion of the talks.

"The Europeans of course need to do the same thing through their system, and their system can sometimes take a little longer than the Australian system, and that's understandable given the number of countries involved," he said.

"But I'm very confident that we've got a great starting point for comprehensive negotiations."

The EU is the largest source of foreign investment in Australia.

The minister would not be drawn on which specific industries stood to benefit the most, but he said the potential for the Australian economy was significant.

"One example I often make reference to is the fact that Australia imports more agricultural products from Europe us with a population of 23 or 24 million than the Europeans do from Australia with their population," Mr Ciobo said.

The Federal Opposition welcomed news that the scoping study was complete, but said it was long overdue.

"It's good, it's about time, but like a lot of things that the Government's doing in trade, it's way behind schedule," Labor's trade spokesman Jason Clare told AM.

"They promised that they'd be negotiating this deal with Europe by now and they still haven't started."

The minister rejected the criticism.

"Well we're perfectly on schedule, the fact is we've got this scoping study in place, and I don't take much trade advice from the Australian Labor Party," he said.

"They don't know if they want bilaterals or multilaterals and frankly they didn't start and conclude any FTAs when they were last in government."

Mr Clare said Labor supported the pursuit of both bilateral agreements with countries like Indonesia, and a multilateral regional economic partnership, known as RCEP.

"That includes, China, India, Japan, South Korea, all the ASEAN nations and Australia and New Zealand, and there's a possibility that that agreement could be signed later this year," he said.

"We need to make sure that Australia is part of it, and that the Turnbull Government signs Australia up to a good agreement that creates jobs for Australian workers."

The Government's pursuit of free trade agreements is part of its agenda to improve Australia's international competitiveness.

Prime Minister Malcolm Turnbull used a speech to the Sydney Institute last night to warn that Australia could not afford to stand still in a rapidly changing global environment.

"If we don't act now, we will be left behind, not only will we miss out on investment, Australian jobs will go offshore, our living standards will stagnate."

Mr Turnbull again sought to make the case for the Government's full 10-year plan to cut the company tax rate to 25 per cent for all businesses.

"Just five days ago the United Kingdom cut its corporate tax rate to 19 per cent, and it will cut it to 17 per cent by 2020. [United States President Donald] Trump is talking about a 15 per cent tax rate," he said.

"But imagine if they only managed to get to 20 per cent we cannot pretend that Australia will be able to compete successfully for capital, business investment and jobs, if the cost of doing business here is so much higher than in comparable countries."

He attacked Labor for failing to back the plan, but Mr Clare said the Prime Minister was not painting a true picture.

"We do have to be competitive and we are this is the key point, the US Congressional Budget Office put out a report about this a few weeks ago and made the point that Australia is competitive with other countries," he said.

"When you take into account things like dividend imputation which most countries don't have, you find that most companies in Australia don't pay the full company tax rate, Malcolm Turnbull forgets that or doesn't want to tell people that."

Topics: government-and-politics, federal-government, parliament, australia, european-union

First posted April 07, 2017 06:16:49

See original here:
Australia moves closer to free trade talks with European Union - ABC Online