A free-trade agreement between Australia and the European Union looks unlikely before Europe’s election season in mid-2024, Trade Minister Don Farrell said, pushing back any potential deal to the second half of the year.

Speaking on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco, Farrell said Australia is still enthusiastic to seal a trade accord with the EU, but the gap between the two sides had been too great to reach any agreement at meetings in Osaka in October.

The minister said both sides had agreed to continue negotiating. “That becomes more difficult because the Europeans now go into their electoral cycle and, to be honest with you, I’m not sure that we’ll necessarily finalize anything between now and when the elections occur,” he said in an interview.

Australia and the EU have been negotiating a free trade pact for more than five years and although most of the deal has been ticked off, disagreement in a few critical areas has delayed it. Canberra wants greater export quotas for its agricultural exports — including beef and mutton — in return for EU demands that Australia remove geographical locators on produce such as prosecco and feta.

European negotiators said they were shocked when Australia walked away from talks in Osaka, the second breakdown in a matter of months, claiming Farrell’s demands went beyond what had been discussed previously.

However, the Australian side said it had been clear it would only sign an agreement that benefited “both Australia and our European friends.”

Farrell said the EU is important to Australia’s trade diversification strategy, adding the bloc is a trillion-dollar economy with more than 450 million people.

“We’ve said all along, it has to be a good deal for Australia. And we haven’t reached that point yet,” he said. “But I’m an optimist.”