Under the pressure of geopolitical and trade policy upheavals, the EU Commission and its negotiating partners are setting a dizzying pace. First the free trade agreement with the Mercosur states, then India, and soon it could be Australia's turn.
On Thursday in Canberra, Federal Foreign Minister Johann Wadephul called for a “swift conclusion” to the agreement. “If it’s up to me, as quickly as possible.” His counterpart Penny Wong was also optimistic. Australia is the fourth stop on the foreign minister’s Indo-Pacific trip – after Singapore, New Zealand and Tonga. Finally, Brunei is on the itinerary.
Next week, Australian Trade Minister Don Farrell will travel to Brussels for negotiations. There is still a dispute about Australia wanting to import higher quotas of beef and lamb into the EU duty-free. The negotiations, which began in 2018, broke down over this issue two years ago. If an agreement is reached, Ursula von der Leyen could travel to Australia to sign the agreement as early as mid-February.
Australia and Germany are both seeking a foothold in a new world of great powers. As a counterweight, they emphasize the value of their partnerships. “It is important that we middle powers work together,” explained Foreign Minister Wong. “We want to contribute to a world in which no country dominates.”
Wadephul also sees Europe’s future in turning to the Indo-Pacific. “This is the world’s growth engine,” he said. Two thirds of global growth is generated in this region. Australia is a very attractive partner for Germany for several reasons. Chinese export controls on rare earths have highlighted the vulnerability of the German economy. Germany is 98% dependent on China.
Australia is one of the world’s leading exporters of raw materials, is the world’s largest producer of lithium and has significant deposits of rare earths. It therefore plays a key role in securing raw materials for the German government. The development will cost Germany money, said Wadephul. However, this is “an existential question of economic security.” The medium-term goal should be to shoulder one third of the risks itself and to seek a partnership with the USA, which has just initiated a raw materials alliance. And, incidentally, “continue to maintain trade relations with China.”
The two countries also want to cooperate on green hydrogen. Australia offers ideal conditions for generating green energy. It has an abundance of wind, sun and land. Canberra has great ambitions to become an exporter of green hydrogen. So far, however, production has not been economical enough for Australia to export on a large scale.
Both countries also want to cooperate more closely in the area of security. In 2021, they expanded their relationship into an extended strategic partnership. Australia is the "most important non-NATO partner working with us", said Wadephul. Since the start of the war, it had provided almost one billion euros in support for Ukraine. The foreign minister promised that Germany also wanted to become more involved on the other side of the world.
Bundeswehr soldiers regularly take part in Australian military exercises such as Pitch Black or Talisman Sabre. European arms deals, on the other hand, have failed. Instead of submarines from France, Canberra bought US-American ones, instead of frigates from Germany, it bought Japanese ones, instead of wheeled armored vehicles from Germany, it bought South Korean ones.
Like Japan, Australia has traditionally relied on the USA for its security strategy. The country is not part of a formal defense alliance. This makes Australia particularly susceptible to US President Trump's changeability. There are therefore also many reasons for Canberra to turn more towards Germany and Europe. Not least the often tense relationship with China, which has recently stabilized somewhat.
The latest free trade agreements and trips are an expression of a dramatic change in German Asia policy. For decades, Germany’s Asia policy was primarily a China policy. This was true even when frustration with Chinese President Xi Jinping’s increasingly authoritarian and nationalistic course grew and the market opportunities for German companies in the People’s Republic became more complicated.
Under Merkel, the German government therefore wanted to focus more on the Indo-Pacific. In 2020, it adopted the Indo-Pacific Guidelines. In reality, however, the Asia policy under Olaf Scholz remained largely a China policy. For Wadephul, however, the Indo-Pacific is “a focus of my foreign policy activities.”
From Feb. 24, Germany, China and the Indo-Pacific states will be looking forward to another trip: Federal Chancellor Friedrich Merz will then make his inaugural visit to China.