Prosecco makers lose out as Australia seals EU free-trade deal after 8 long years of talks
- Written by: Hazel Moir, Honorary Associate Professor; economics of patents, geographical indications and other "IP"; trade treaties, Australian National University
Nearly eight years ago Australia and the European Union (EU) launched trade negotiations. Finally, today Australian Prime Minister Anthony Albanese and EU President Ursula von der Leyen signed an agreement in Canberra.
Von der Leyen said the deal would remove nearly all tariffs and add about A$8 billion to Australia’s economy a year. She told reporters:
It will become easier for Australia to export to the European Union based on high standards.
Overall the EU, with its 450 million people, is Australia’s third-largest trading partner. In 2024, two-way trade was A$110 billion. In practical terms, however, our exporters are selling into 27 different countries, each with their own culture and retail system.
When Australia walked away from negotiations in 2023, it was because of problems with the EU’s demand for naming rights for food and drink products and the very limited EU offer for tariff-free quotas to sell our agricultural goods in Europe.
The trade negotiations restarted in June last year with a renewed sense of urgency following US President Donald Trump’s sweeping tariffs that upended global trade.
Improved market access for beef
The announcement today demonstrates some improvement in the market access offer for beef. The background to the quota limitations on selling Australian beef in Europe is complex, but the agreement is disappointing for both the beef export and lamb export industries.
They had pushed for quotas of 50,000 and 67,000 tonnes respectively, but have only achieved 35,000 and 25,000 tonnes.
The actual outcome is a compromise, increasing existing quotas eightfold, but falling far short of industry demands.
But it is likely European farmers will still object, as they did with the recent EU-Mercosur trade agreement with South American nations.
Prosecco at home, but not abroad
Turning to naming rights, the standout names that had been disputed until today were parmesan, feta and prosecco. In Australia these are common names – parmesan and feta are names for cheese varieties, similar to cheddar and brie.
Australian producers have always been allowed to use the name prosecco for wine made from prosecco grapes, under our bilateral wine treaty with the EU.
Because prosecco is globally recognised as a grape variety name, Australia has also been able to export prosecco-labelled wine, though not to the EU itself.
Under today’s deal, Australia will give up the right to export wine under the prosecco name and the bilateral wine treaty will be amended to reflect this change, to be phased in over ten years.
Continued domestic use of the word prosecco will be subject to as-yet-undisclosed new labelling requirements.
In 2013 the EU attempted to register the name prosecco in Australia as a certification trademark, but this was rejected. Today’s compromise partly reverses that outcome.
This is a clear loss: it recognises our sovereignty at home, while sacrificing a valuable naming right abroad. Industry sources put the value of this at around A$7 million a year.
What about the cheese makers?
The outcome for parmesan is good, while for feta it seems to at least equal the arrangements for Canada.
Parmesan has now been accepted by the EU as a common name in Australia. This parallels existing EU recognition of parmesan as a common name in its other trading partners, such as South Korea and Japan. Producers of feta will be able to continue to use the name feta.
This is a long and complex treaty and so far only summaries are available. Once the detailed legal wording becomes available, there will be nuances that are not evident today. This includes issues such as the right of existing feta producers to sell their businesses, complete with current naming rights.
Our boutique spirits industry
A little-discussed loss in the trade agreement is the lack of any proper opposition process to dispute the names the EU wants protected by the treaty. This could be of particular concern to new operators in the burgeoning boutique spirits industry.
The EU has achieved “protection” for 231 spirit names and there will be no due process to object to these.
Buyers beware: EU labels can be misleading
Consumers will also need to be aware of the accuracy (or inaccuracy) of product labels for EU products.
These are exempt from EU regulations requiring that the label state the country of origin of the main ingredient, where this differs from the country of production.
For example, Bresaola della Valtellina – an Italian product – is made from meat imported from Brazil. Nowhere on the label is this disclosed.
On other fronts, claims about improved labour access to Europe remain to be demonstrated, as do claims that European investment in Australia will increase.
The 5% tariff on imported European cars has been removed and this will level the playing field with other vehicle imports.
But easing Australia’s luxury car tax should not have been necessary. This tax was simply a means of ensuring the wealthy paid a fairer share of tax. There are no trade-related reasons to change it.
Overall, there are large claims as to the benefits of this trade treaty. But some – such as mutual recognition of professional qualifications – will take many years to implement. Only time will tell if the mooted benefits are real wins for Australia as a whole and whether they offset losses such as to prosecco exporters.
Authors: Hazel Moir, Honorary Associate Professor; economics of patents, geographical indications and other "IP"; trade treaties, Australian National University
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