Australia and the European Union finalized a landmark free trade agreement after eight years of negotiations, aiming to boost commerce, cut tariffs, and strengthen security ties.
The pact was announced in Canberra by Australian Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen, marking a significant step in diversifying trade amid global economic pressures from the United States and China.
The agreement will eliminate over 99% of tariffs on EU goods exported to Australia, saving roughly €1 billion ($1.16 billion) annually for businesses. Australian tariffs on wine, fruit, vegetables, chocolate, and cheeses will be reduced to zero immediately or phased in over three years.
European automakers will benefit from Australia raising the luxury car tax threshold on electric vehicles, with 75% of EVs now exempt. Australia will also cut tariffs on critical mineral imports.
The deal includes beef and sheep meat quotas to protect EU farmers while expanding market access for Australian producers. Two tariff rate quotas for beef totaling 30,600 tons will open, with 55% duty-free for grass-fed beef and the remainder at a reduced 7.5% duty, phased over five years. EU markets will also accept 25,000 tons of Australian grass-fed sheep and goat meat over seven years.
Geographical product names, including parmesan, feta, and prosecco, were another negotiation focus. Australian producers can continue using some names if in use for five years, while exports of prosecco-style sparkling wine will transition off the label within ten years.
Australian Trade Minister Don Farrell stated the deal could generate AU$10 billion ($7.1 billion) in trade for Australia in its first year.
The trade pact also formalizes a security and defense partnership between Australia and the EU, reflecting a shared global perspective. Final approval is pending ratification by the European Council and the Australian Parliament.
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