The outgoing European ambassador to Australia has flagged the signing of a long-awaited free trade agreement within the next year amid a sense of urgency from both sides.
Michael Pulch, who is due to depart Australia at the end of the month, says there are no deal-breakers inhibiting the agreement with representatives due to meet in Brussels in October.
"I sense urgency or a priority for this free trade agreement both here in Australia but also in Europe," he told AAP.
"We're giving it now the necessary priority that it deserves and there is a wish to finalise this within a year's time.
"The first good news is there is no deal breaker. We had a scoping exercise before we launched negotiations ... and there's not a single issue that would prevent us from doing (reaching an agreement)."
Both sides are yet to find middle ground on expanded access to Europe's agricultural markets and agreement on geographical indication protections for 400 products.
This means locally produced Australian goods will be banned from using protected European names such as "feta" cheese and "kalamata" olives.
Such a move could come at significant costs to Australian businesses.
"There are a few sensitive matters," Mr Pulch said of the negotiations.
"We are working already on some of these details."
Europe is also supporting a move to abolish the luxury car tax which can inhibit Australians from accessing the latest energy-efficient cars, Mr Pulch said.
"All in all, we've made good progress," he said.
It comes as Europe places a new focus on the Indo-Pacific as it works to diversify its trading relationships away from China in light of over-reliance on Russian gas.
"We will increase our trade relationship with the free trade agreement and that's important for both Australia and us because we need trade diversification," Mr Pulch said.
"We put all our eggs in one basket and we've learned the hard way you shouldn't be too dependent from one single market access or one supplier. In our case, energy supply from Russia."
Bur Mr Pulch says Europe's involvement in the region remains inclusive of China, but noted that Western nations need to divest from the country to avoid over-reliance.
"Trade diversification is a key aspect of what we're doing. We believe there is a lot of unused potential in relations with many countries (in Asia)," he said.
Europe is also in talks with large energy companies about the supply of energy resources from Australia to help bridge the shortfall after Russia choked gas supplies.
"We certainly talk to Australia as one of the world's largest LNG suppliers to see whether we could secure more energy supplies to Europe to offset Russian supplies," Mr Pulch said.
"Gas from Australia doesn't necessarily have to be exported to Europe in order to support us.
"What we could also envisage is a situation whereby Australia meets more demands here in Asia and that would free up LNG exports from Qatar, for instance."
The export of green hydrogen from Australia to European ports could also help offset the energy shortfall, Mr Pulch added.
"Some of our member states have signed already cooperation agreements with Australia and we've taken steps to enable our ports to offload green hydrogen coming from outside, in particular from Australia," he said.
"So that's another element of our diversification of energy supplies.
"We would encourage our Australian partners to work with us and I see a lot of potential of doing more together in the future and that also extends to supply of critical minerals."
Australian Associated Press
