Skip to main content

Submarines could delay EU Australia trade deal with data sovereignty implications

by Cameron Sinclair •
Free resource

One of Australia’s first trade agreements to contain a dedicated chapter on digital trade is at risk due to the bitter fallout of the AUKUS submarine deal.

Under the proposed agreement, businesses would not be forced to build data storage centres, or use local computing centres, as a condition of conducting business.

France is now calling on the EU to delay its negotiations on the EU-Australia Trade Agreement, with the French Secretary of State for European Affairs, Clement Beaune, stating that it is “unthinkable” to move on with the negotiations “as if nothing had happened.”

Trade deals have historically included chapters on telecommunications and services, but have only recently begun to incorporate electronic commerce and data.

A chapter on digital trade, known as the  (DEA), was added to the Singapore-Australia Free Trade Agreement (SAFTA) in 2020.

The proposed agreement with the EU would mirror many of the SAFTA provisions, including preventing unnecessary restrictions on the transfer and storage of data.

Other protections in the proposed agreement include:

  • Ensuring businesses are not forced to disclose or transfer their product source code as a condition for the import, distribution, sale or use of software;
  • New commitments on e-invoicing and e-payment frameworks, based on international frameworks; and
  • Online consumer protections to protect personal information and discourage unsolicited commercial electronic messages (spam).

The EU and Australia began negotiating the trade agreement in June 2018, and completed the 11th round of negotiations in June 2021.

France is lobbying to delay the 12th round, scheduled for October.

Australia’s 2017 Foreign Policy White Paper set out a range of digital trade objectives, including that “FTAs incorporate rules facilitating digital trade - such as on electronic signatures and data flows - as well as protecting consumer rights online. Australia also promotes international standards on digital trade that are industry-led and technology neutral.”

Speaking at the National Press Club on 22 September, Australian Trade Minister Dan Tehan appeared unperturbed by the French position.

He noted that he expected negotiations to carry on and emphasised that it is in both the EU and Australia’s interests to continue with the FTA.

The EU is Australia’s third largest trading partner and experts estimate that the agreement could increase EU exports to Australia by up to a third, and help EU companies to better participate in government procurement in Australia.

Even prior to the current French unhappiness, diplomats were not expecting the agreement to completed until early 2022.

A delay would play well for France, who are scheduled to hold the EU presidency for the first six months of 2022, which coincides with their presidential elections in April 2022.

  • Federal
  • IT Services
  • Software
  • Finance & Services
  • Industry & Investment