The President of the European Commission, Ursula von der Leyen, on Tuesday sealed a free trade agreement with Australian Prime Minister Anthony Albanese, reducing tariffs on most agricultural products and exports from the European Union.
This agreement is a new victory for Brussels, which is striving to diversify its trade relations and secure strategic partners in a context of growing global tensions.
According to the Commission, the pact will allow the European Union to save one billion euros annually on tariffs, and exports are expected to increase by 33% over the next decade.
Agriculture emerged as a hot spot, with European farmers already opposing the Mercosur trade deal and a legal challenge from European lawmakers threatening the agreement’s ratification.
Tariffs will be reduced to zero on products such as cheese (over three years), wine, certain fruits and vegetables, chocolate, and processed foods.
On the most contentious issues – beef and sheep, which caused negotiations to fail in 2023 – Australia has agreed to quotas of 30,600 and 25,000 tons per year, respectively.
A safeguard mechanism will allow the European Union to protect sensitive sectors if an increase in Australian imports harms the Union’s market.
In addition to agriculture, the agreement opens access to essential raw materials from Australia, including aluminum, lithium, and manganese.
Brussels also failed to eliminate the Australian luxury car tax. However, 75% of EU electric vehicles will be exempt.
The agreement is a strategic breakthrough
The Commission expects a significant increase in exports in key sectors, including dairy products (up to 48%), motor vehicles (52%), and chemicals (20%).
Brussels prioritized the agreement as part of establishing partnerships in the Indo-Pacific region, where China’s influence has become central. A security and defense partnership with Canberra was also announced on Tuesday.
“The EU and Australia may be geographically distant, but we could not be closer in our world view,” said Ursula von der Leyen, adding: “With these new dynamic partnerships in security and defense, the EU and Australia are drawing closer: “With these new dynamic partnerships in security and defense, as well as trade, we are drawing even closer.”
Since Donald Trump’s return to power in 2025, trade agreements have gained greater strategic importance for the EU, which is seeking new markets.
In 2025, Brussels concluded agreements with Mexico, Switzerland, and Indonesia. The Mercosur pact was also signed earlier in the year and will be provisionally applied from May 1, despite a legal challenge from the European Parliament and strong reservations expressed by France.
Other agreements could follow. Discussions are underway with the Philippines, Thailand, Malaysia, the United Arab Emirates, and countries in East and Southern Africa, Ursula von der Leyen told EU ambassadors on March 9.
