The European Union and Australia have signed a long-awaited free trade agreement, as Brussels looks to diversify its global partnerships amid rising trade tensions with the United States and broader global uncertainty.
The agreement, signed on March 24 after eight years of negotiations, will remove tariffs on almost all goods traded between both sides and strengthen cooperation in defense and critical minerals supply. The deal is one of several trade partnerships the EU has pursued to expand its global trade network.
Under the agreement, more than 99 per cent of tariffs on EU goods exports to Australia will be eliminated, saving European companies an estimated €1 billion annually. EU exports to Australia are expected to grow by up to 33 per cent over the next decade.
Australian Prime Minister Anthony Albanese said the agreement would be worth about A$10 billion annually to the Australian economy, noting that removing tariffs on Australian critical minerals entering the EU would help stabilise global supply chains.
European Commission President Ursula von der Leyen said the partnership would strengthen trade, security, and defence cooperation between both regions, while also reducing overdependence on single suppliers for critical resources.
Despite the breakthrough, the deal has faced criticism from farmers on both sides. Some Australian agricultural exports, including beef and sheep meat, will still face quotas under the agreement, which Australian farmers say limits meaningful market access. Meanwhile, French farmers argued that the quotas offered to Australian beef exporters were too generous and could harm local producers.
The Executive Magazine reports that Australia agreed to immediately remove tariffs on European wine, sparkling wine, fruit, vegetables, and chocolates, while tariffs on cheeses will be phased out over three years. The EU will remove tariffs on many agricultural products but maintain quotas on key exports such as beef, where tariff-rate quotas will total 30,600 metric tonnes.
The agreement also includes protection for EU geographical indication products such as Pecorino Romano and Ouzo, while some products like feta may continue using the name if their origin is clearly labelled.
In addition, Australia agreed to raise the luxury car tax threshold for EU-made electric vehicles to A$120,000, exempting most EU electric vehicles from the tax.
The EU exported €37 billion worth of goods to Australia in 2025 and €28 billion in services in 2023. The EU is Australia’s third-largest two-way trading partner and second-largest source of foreign investment, highlighting the growing economic ties between both partners.
