The European Union and Australia have reached a free-trade agreement after years of negotiations, according to announcements from Australian Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen. The deal was sealed on Tuesday, with the European Commission stating it will remove over 99 percent of tariffs on EU exports, including on wine, fruit, vegetables, and chocolate. Tariffs will eventually fall to zero on products such as cheese over three years, chocolate, and processed foods.
On sensitive agricultural issues, Australia agreed to quotas of 30,600 tonnes per year for beef and 25,000 tonnes for sheep meat, with a safeguard mechanism reportedly allowing the EU to protect its market if Australian imports surge. The agreement is expected to save the EU 1 billion euros annually in duties, with exports projected to increase by up to 33 percent over the next decade. Key sectors like dairy, motor vehicles, and chemicals are anticipated to see strong export gains.
Beyond trade, a new security and defence partnership was launched, focusing on areas including defence industry, cybersecurity, and counter-terrorism. The deal aims to strengthen trade, investment, and economic growth, and must now go through internal processes before taking effect. According to reports, the EU has prioritized this agreement as part of efforts to diversify trade ties and build partnerships in the Indo-Pacific amid rising global tensions, with other trade deals reportedly struck in recent years.