Traders Market Weekly: September 19 to 25 2021


Reports EU free trade talks with Australia at risk over submarine deal

Politico report the EU-Australia talks are at risk of collapsing.

The background to this is the new agreement between Australia, the US, and UK, which includes Australia getting submarines. Australia had a contract for French subs but this has been set aside with the new AUKUS (Australia-UK-US) agreement). France has reacted with anger, recalling ambassadors from Washington and Canberra.

The report (in brief):

Clément Beaune, France’s European affairs secretary, told POLITICO that Europe could hardly continue talks for a free-trade agreement after such a breach of trust. Brussels has held 11 rounds of talks with Canberra to date, and Australia originally hoped to conclude the accord before the end of the year.
“Keeping one’s word is the condition of trust between democracies and between allies,” he said. “So it is unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer trust.”

In theory, the European Commission has exclusive powers to conduct trade talks on behalf of the 27 member countries. But it would be impossible for Brussels to plow on in the face of outright French opposition.