Australia and the European Union have signed a landmark trade agreement, eliminating over 99% of tariffs on EU exports to Australia and deepening economic ties in the Indo-Pacific.
SYDNEY: Australia and the European Union have signed a long-awaited trade deal, marking a significant step in Europe’s strategy to diversify its export markets and strengthen ties in the Indo-Pacific.
The agreement, finalised on Tuesday, will remove over 99% of tariffs on EU goods exports to Australia. This is expected to save European companies one billion euros a year in duties.
European Commission President Ursula von der Leyen said the deal brings the two partners closer together. “The EU and Australia may be geographically far apart but we couldn’t be closer in terms of how we see the world,” she stated after meeting Prime Minister Anthony Albanese in Canberra.
The deal also lowers tariffs on imports of critical minerals into the EU. This reflects a broader push by the bloc to reduce its dependency on China for key resources.
Negotiations began in 2018 but had stalled in 2023 over disagreements on EU quotas for meat imports. The recent momentum comes amid rising global trade tensions.
For Australian agriculture, EU tariffs will drop to zero for wine, fruit, vegetables and chocolates immediately. Tariffs on cheese will be phased out over three years.
The EU will grant Australia new quotas for beef exports. Two tariff rate quotas totalling 30,600 tonnes will be opened, with about 55% of the volume entering duty-free.
In services, the EU gains improved market access for its telecoms and financial services companies. The European Commission expects the pact to boost total EU exports to Australia by up to 33% over the next decade.
Trade between the two economies is already substantial. EU firms exported 37 billion euros of goods to Australia in 2025 and 28 billion euros of services in 2023.
The EU was Australia’s third-largest two-way trading partner in 2024. It also ranked as Australia’s sixth-largest export destination and second-largest source of foreign investment.
The agreement follows recent EU trade accords with Indonesia and India, signalling Europe’s growing engagement in the Indo-Pacific region.
