As part of negotiations for a free trade agreement with the European Union, Australia’s Trade Minister Don Farrell has offered easier access to the country’s enormous key minerals industry in anticipation of potential future negotiations as early as next week.

Australia and the 450 million-person bloc’s negotiations came to a standstill in July, in part due to the question of broader market access for Australian agricultural exports like cattle.

A free trade agreement, according to Farrell, would facilitate European investment in the developing critical minerals sector of the nation, in part by facilitating entry through required Foreign Investment Review Board (FIRB) screening. Farrell made this claim in an interview with Reuters on Thursday.

“They get easier access through the FIRB processes,” Farrell said.

In an effort to diversify supply chains away from leading producer China, Australia produces about half of the world’s lithium as well as other minerals like rare earths needed in batteries for electric cars and military.

“One of the big advantages we’ve got in this relationship is our access to critical minerals, rare earths, hydrogen and ammonia,” Farrell said.

“Other countries are looking to invest in our critical minerals and other renewables. We want European investment… but they’ve got to understand that as part of that process they’ve got to make a realistic offer.”

In a video presentation to a Sydney audience on Tuesday, German Foreign Minister Annalena Baerbock stated that Germany wants to purchase rare earths and lithium from Australia as part of a larger drive to diversify its trading partners and reduce its reliance on China.

Europe “understands, just as we have learned, that putting all of your trade eggs in one basket is a dangerous trade strategy,” according to Farrell.

Australia needed foreign investment to grow its clean energy industry, but Farrell foresaw competition from Americans, South Koreans, Japanese, and investors in Singapore.

According to the rules of the U.S. Inflation Reduction Act, Australia was one of the few nations to have both mineral deposits and a free trade agreement with the U.S., making it an exceptionally appealing location for essential minerals investment from the U.S., according to Farrell.

In May, the two nations agreed to a deal that may allow Australian key mineral suppliers to take advantage of the incentives the U.S. Inflation Reduction Act is utilising to boost domestic production.

In addition to inviting Dombrovskis to Australia, Farrell stated that he anticipated holding teleconference talks with his counterpart, EU Commissioner for Trade Valdis Dombrovskis, “in the next week or so.”

“I believe we will get a more improved offer and the 64 dollar question is will it be enough,” he said.

(Adapted from USNews.com)

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