After nearly eight years of negotiations, Australia and the European Union have concluded a landmark Free Trade Agreement (FTA). The deal was announced on 24 March 2026 in Canberra by Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen, alongside Australian Trade Minister Don Farrell and EU Trade Commissioner Maroš Šefčovič.
Negotiations between Australia and the EU were launched on 18 June 2018. The EU is Australia’s third-largest two-way trading partner and second-largest source of total foreign investment, with a nominal GDP of USD 21.1 trillion in 2025 and a market of around 450 million people.
What the FTA Covers
The trade agreement will result in 98 per cent of the current value of Australia’s exports entering the European Union duty-free. Australian farmers and producers will benefit from the elimination of almost all EU tariffs on agricultural products, including wine, nuts, fruit and vegetables, honey, olive oil, most dairy products, wheat and barley, and seafood.
On the EU side, exports are expected to grow by up to 33% over the next decade, with their value reaching up to 17.7 billion euros annually. Key sectors with strong growth potential include dairy, motor vehicles, and chemicals. EU investment in Australia has the potential to grow by over 87%.
Almost all Australian exports of manufactured goods and mineral resources will face zero import tariffs into the EU. The elimination of tariffs on Australian critical minerals and hydrogen is expected to support Australia’s ambitions in renewable energy and help stabilise global supply chains.
The agreement removes over 99% of tariffs on EU goods exports to Australia, cutting approximately 1 billion euros a year in duties. It also opens the Australian services market in key sectors, including financial services and telecommunications, and provides greater access for EU companies to Australian government procurement contracts.
Agriculture and Geographical Indications
For important agricultural products including beef, sheep meat, sugar, rice, wheat gluten, skimmed milk powder, and natural butter, the agreement delivers commercially meaningful access through new or expanded tariff rate quota volumes.
The agreement protects 165 agricultural and food Geographical Indications and 231 spirit drink GIs. A modernised bilateral wine agreement will also offer protection for all EU wine GIs, covering 1,650 names.
Australia has protected the rights of its producers to continue using well-known terms such as ‘parmesan’ and ‘kransky’ and has preserved the right for Australian winemakers to continue making and selling Prosecco domestically. Grandfathering and phase-out periods have been secured for a limited number of terms, including Feta, Romano, and Gruyere.
Critical Raw Materials and Sustainability
Australia is a major producer of raw materials, including aluminium, lithium, and manganese, which are vital for the EU’s economic security. The deal facilitates EU access to Australian critical raw materials, with dedicated provisions making the market more predictable and reliable for EU businesses.
The FTA fully integrates EU standards on trade and sustainable development, including binding commitments on workers’ rights, gender equality, the environment, and climate. All such commitments will be enforceable via the agreement’s general dispute settlement mechanism.
Taking to social media, European Commission President von der Leyen wrote, X: “Australia is one of the world’s most important producers of critical raw material. In contrast, Europe is one of the world’s major users. So today, we agreed on four major projects, covering the production of rare earths, lithium, and tungsten. And we also agreed to launch negotiations on Australia’s accession to Horizon, Europe’s flagship innovation programme!”
Meanwhile, Prime Minister Albanese stated, X: “Australia and Europe are taking our relationship to the next level with a once-in-a-generation Free Trade Agreement and Security and Defence Partnership. More jobs. More security. More local products in global markets.”
Alongside the FTA, the EU and Australia announced the adoption of a Security and Defence Partnership on 18 March 2026 and agreed to launch formal negotiations for the association of Australia to Horizon Europe, the world’s largest funding programme for research and innovation.
