EU and Australia reach agreement on free trade, defense partnership

The European Union and Australia today concluded free trade negotiations after eight years of negotiations, with the final agreement reached in Canberra by European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese.

In addition to the free trade agreement, Von der Leyen and Albanese also concluded an agreement on the security and defense partnership between the EU and Australia.

The European Commission announced that the European mechanical engineering, automotive and chemical industries will benefit the most from the removal of trade barriers, as customs duties on these products will be abolished from the moment the agreement is signed.

The EU machinery industry exports goods worth 13 billion euros to Australia, the value of automotive exports is six billion, and the chemical industry two billion euros.

New opportunities are also opening up for EU farmers, as Australia will eliminate tariffs on some key products, such as cheese, wine and bakery products. Australia will eliminate approximately 99 percent of tariffs on EU imports, and EU professionals will also have a better position in the Australian job market.

It is particularly important for the EU to have better access to strategically important Australian raw materials and rare minerals.

Albanese said the lifting of tariffs on wine, fish and seafood, and the planned relief for agricultural exports and beef, meant a lot to his country. Despite the relief, the EU reserved the right to intervene if excessive imports of agricultural products from Australia threatened domestic producers.

Ursula von der Leyen said that the agreement, through the elimination of tariffs, should give a new boost to the economy and contribute to greater prosperity.

She said that it is important for the EU to develop and diversify its international trade relations, especially in the current situation in which the US is becoming an increasingly difficult partner due to President Donald Trump's aggressive tariff policy, and China is acting increasingly self-confident.

The agreements were also welcomed by representatives of the European Parliament. The chairman of the foreign affairs committee, David McAllister, said that the agreement on security and defence partnership was a "new milestone" in EU-Australia relations.

The chairman of the foreign trade committee, Bernd Lange, said that "in times of geopolitical rivalry and protectionism, the EU stands for certainty, predictability and economic benefits for its workers, producers and consumers" and that it "chooses cooperation over isolation".

The EU decided to launch free trade negotiations with Australia back in 2018, but those negotiations have suffered setbacks over time, for example due to a separate Indo-Pacific security pact that Australia concluded with the US and Britain, and after Canberra canceled a billion-euro deal to purchase French submarines.

The latest dispute in the negotiations was over agriculture and some products that have a protected geographical origin in the EU, for example feta, gruyere and parmesan cheeses, or the sparkling wine Prosecco produced under that name in Australia. Negotiations accelerated again after Donald Trump arrived in the White House.

The EU is, after China and Japan, Australia's third largest foreign trade partner.

In the EU, before being finally signed, the agreement must undergo legal review and receive the green light from the EU Council and the European Parliament, and then the document must be ratified by the Australian Parliament.