From left, European Union (EU) Trade Commissioner Maros Sefcovic, European Commission President Ursula von der Leyen, Australian Prime Minister Anthony Albanese and Australian Trade Minister Don Farrell during a press conference at Parliament House in Canberra, Australia, on Tuesday, March 24, 2026.
Hilary Wardhaugh | Bloomberg | getty images
European Union and Australia A sweeping trade deal was agreed on Tuesday, the latest step by US allies in rethinking their economic ties amid deepening global geopolitical uncertainty.
The agreement, which resulted from nearly eight years of negotiations, will remove most tariffs imposed by both sides on each other’s goods and allow the EU greater access to vital mineral supplies from Australia.
Under the long-awaited trade deal, the EU is set to eliminate almost 98% of its duties on exports of Australian goods including wine, dairy, wheat and barley and seafood. In return, Australia will remove more than 99% tariffs on EU goods, particularly dairy, motor vehicles and chemicals.
“We are sending a strong signal to the rest of the world that in times of turmoil, friendship and cooperation are what matter most,” European Commission chief Ursula von der Leyen said in a statement on the commission’s website on Tuesday.
“The EU and Australia may be far apart geographically but we couldn’t be closer in terms of how we see the world,” he said. “With these dynamic new partnerships on security and defence, as well as on trade, we are moving even closer together.”
European Commission leader von der Leyen met Australian Prime Minister Anthony Albanese earlier this week to conclude talks that began in 2018.
Talks stalled in 2023 Some disagreements with Canberra There are calls for more quotas for lamb and beef exports to Europe, while the EU has pushed for better access to Australia’s vital minerals and lower tariffs. The two sides later stepped up talks in the wake of higher US tariffs under the Trump administration.
EU exports to Australia are expected to grow by 33% over the next decade, increasing export value to €17.7 billion ($20.5 billion) annually. EU achieves surplus of €28 billion goods trade with australia In 2024.
The EU mostly imports mineral and botanical products from Australia while exporting machinery and equipment, transport equipment and chemicals to the Asia-Pacific country.
None of us is immune from the geopolitical and economic shocks that the war in Iran delivers to our populations.
Ursula von der Leyen
Head of the European Commission
Almost all Australian exports of manufactured goods and mineral resources will face zero import duties into the EU. Investments from the bloc – Australia’s second-largest source of foreign investment – could grow by more than 87% in 2024, according to a government statement.
The agreement includes a bilateral safeguard mechanism that allows the EU to take measures to protect sensitive European products and their producers if increased imports from Australia cause damage to the EU market.
critical mineral supplies
The European bloc is also set to secure from Australia some supplies of critical raw materials (CRMs) such as aluminium, lithium and manganese, which are vital to the EU’s overall economic security.
“Trade in CRM is currently easily disrupted by sudden economic or geopolitical shocks,” the EU said in the statement, stressing that partnerships with “trusted partners” are essential to safeguarding its supply.
This group is especially trying to reduce dependence on China. Critical minerals where Beijing has imposed export controls on some key resources.
On the security front, Australia and the European bloc are committed to strengthening cooperation in areas such as crisis management, maritime security and disruptive technologies including artificial intelligence.
diversifying trade relations
US President Donald Trump’s campaign to target US allies with heavy tariffs, dismantle the rules-based trading system, as well as launch surprise strikes in Venezuela and Iran without prior warning to key allies has strained relations between Washington and many of its traditional partners.
Leaders of Western countries, notably Canadian Prime Minister Mark Carney, have called for “middle powers” to work together to counter the rise of unilateralism among the global superpowers.
Speaking in the Australian Parliament about the ongoing conflict in the Middle East, which has sent global oil prices soaring, von der leyen “None of us is immune from the geopolitical and economic shocks that the war in Iran delivers to our population,” he said Tuesday.
The regional war has reignited fears of energy supply shortages and an inflationary shock in Europe, which is heavily dependent on imported crude oil and natural gas.
The EU also reached a trade deal with India earlier this year under which tariffs on more than 90% of goods traded between the two will be removed or reduced. negotiations concluded Last year on the trade agreement with Indonesia.
A trade deal with Mercosur, the South American bloc including Argentina, Brazil, Uruguay and Paraguay, is expected to begin taking effect. provisional basis from may, The European Commission said on Monday.
