The European Union could ink its long-awaited free-trade deal with Australia by next year after nearly half a decade of talks, the outgoing ambassador believes.
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The signing of a deal next year could see Australian consumers gain access to cheaper goods and services produced within the trading bloc, as inflation is projected to continue rising during the post-pandemic recovery.
EU Ambassador to Australia Dr Michael Pulch, who is set to finish his five-year posting this month, said there was "a lot of goodwill" among the trading bloc's nation members, following an impasse over emissions reduction targets and diplomatic setbacks.
"When I look back at these five years now, my impression is that we are on an upward trajectory in this relationship," Dr Pulch told The Canberra Times earlier this month.
"We should not forget there are a number of of issues that we still need to finalise.
"There will be some sensitive issues, which will mean that we have to have a good - and how shall I say - trustful negotiation on those issues."
Those sensitive issues included the much-publicised AUKUS row, which affected ties with France and triggered concerns over how Australia conducted major negotiations, along with the former Coalition government's struggle to put forward mid-term climate reduction targets.
But the EU envoy is optimistic the worst is behind us as he makes his return to Brussels.
The election of the Albanese Labor government is also a promising step forward for regional security, Dr Pulch suggested.
A number of Pacific leaders have been sceptical, and at times, critical, of the former government's refusal to budge on lifting emissions reduction targets.
But Labor's promise to legislate a 43 per cent reduction of the country's carbon emissions by 2030 - if it's successful in both houses - will help strengthen Australia and the EU's ties to Pacific nations amid rising competition.
"It's made much easier by the fact that Australia now [has] a credible climate change policy," Dr Pulch said.
"When we talk about security, these countries understand the survival of their countries is the main security issue for them.
"We have to address them if we want to be relevant for them."
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The other elephant in the room is flaring tensions between China and the US over a visit by US House Speaker, Nancy Pelosi, to Taiwan earlier this month.
The European Union considers China a "partner, rival and competitor" and has a "very clear" One China policy.
But Dr Pulch said he recognises it won't always be that simple as the President Xi-led country tests the boundaries of the established rules-based order.
"We will see that this relationship is fluid - it changes," he said.
"We want obviously to have more areas where we are partners but we have to be realistic that we will also see more areas where we will probably be systemic rivals."
He remained adamant that "a peaceful resolution" could be reached in the Taiwan Strait but wouldn't rule out the EU's assistance if China took more drastic action to assert its claims.
"We will cross that bridge when we come to it," he said.
"I think important is the work that we do in order to prevent that. And our emphasis will always be on that."