After eight years of negotiations, the two sides concluded talks on the agreement on Tuesday, The drafted agreement will now go through legal checks and be translated into the 24 official languages of the EU. Formal agreement is expected to be signed later this year or early 2027. Further parliamentary and legal steps are expected to take another year for the Agreement to come into force- similar to the Indo- EU FTA signed last month,

The agreement is important because till now the EU has been Australia’s largest trading partner without a free trade agreement (FTA).  As a single market, the EU is Australia’s third largest trading partner and second largest source of foreign investment.

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This has been the most important and debatable point that had created confusion and anguish amongst the Australian Prosecco producers, especially those with Italian descent, who had been growing Prosecco grapes and making the bubbly for over 30 years. But the formation of two consortiums of Prosecco DOC and Prosecco DOCG in 2009 in Italy renaming the grape as the original Glera, had upset  the Italian Prosecco producers, especially because the terroir and growing conditions of these grapes, especially in King’s Valley were perfect for good quality wines and the two countries had started competing in the international markets.

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The legal action taken by the consortiums with the help of the EU had resulted in all other countries stopping to buy Australian Prosecco, including India where a couple of importers had started importing Prosecco from Australia. Though slightly more expensive they were of very good quality and threatened the growth of the authentic Italian bubbly.

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Several legal battles were fought in courts and finally the Australian Trade Make Authority had rejected Italian plea who had nothing left in their armoury except using pressure on the Australians in the ongoing FTA negotiations. The Agreement is thus a partial win and a truce between the two warring nations. It allows Aussies to continue making it for the domestic market but not for exports. The existing exporters can export for 10 years, possibly reducing the quantum every year and Aussies finding a mutually acceptable alternative nomenclature for the bubbly in the export markets. This had happened with Tokaj wines of Hungary and Tokai grapes of Friuli (both constituents of the European Union, at the turn of the century which was obliged to change the name of its grapes to Friuliano in 2007.

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Australian Grape & Wine (AGW) has welcomed key elements of the FTA, including the removal of tariffs on Australian wine exports to EU member states while simultaneously highlighting the “significant implications” the agreement will have for producers exporting Australian Prosecco. Australian wine exported to the European Union will not be subjected to tariffs upon entry, resulting in savings of millions of dollars every year and will become more competitive.

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Subhash Arora