It is estimated that EU exports could grow by up to 33% in the next decade
The European Union (EU) and the Australian government announced yesterday the adoption of an ambitious and balanced Free Trade Agreement (FTA), as well as an innovative Security and Defence Partnership. Both parties also agreed to begin negotiations for Australia's participation in Horizon Europe, the world's largest research and innovation program.
The final text of the FTA was agreed in Canberra, during a meeting between European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese. The Security and Defence Partnership (SDP) was signed virtually by High Representative and Vice-President Kaja Kallas and Australian Deputy Prime Minister and Minister of Defence Richard Donald Marles, along with Foreign Minister Penny Wong.
With the Free Trade Agreement, the EU opens its market to one of the world's fastest-growing developed economies, bringing significant economic opportunities to European businesses, consumers, and farmers. EU exports to Australia are expected to increase by up to 33% over the next decade, reaching a value of up to €17.7 billion annually. Sectors with the greatest growth potential include dairy products, with a projected increase of 48%; motor vehicles, with 52%; and chemicals, with 20%. EU investment in Australia also has the potential to grow by more than 87%.
The agreement will grant EU exporters preferential access to the Australian market, eliminating more than 99% of tariffs on goods exports. It will also open the Australian services market in key sectors, including financial services and telecommunications, and provide EU companies with greater access to Australian public procurement contracts. Furthermore, to ensure that small businesses benefit from the agreement, the FTA includes a chapter dedicated to SMEs to help them increase their exports. The agreement will also facilitate the work of EU professionals in Australia, while entry quotas for engineers and researchers will boost European and Australian innovation.
Furthermore, the agreement includes strong sustainability commitments, which will contribute to greener and fairer trade and ensure that imports to the EU are more aligned with the EU's own production standards regarding climate, the environment, and animal welfare.
European Commission President Ursula von der Leyen stated that "these agreements have established lasting structures based on trust to support peace and security through strength; boost prosperity through rules-based trade; and work together to defend global institutions. We are committed to building a cleaner, more digital future for our citizens, workers, and businesses. And we are sending a powerful signal to the rest of the world that friendship and cooperation are what matter most in turbulent times."
The SDP, for its part, builds on the strong track record of defence cooperation between both parties, whose global vision is aligned in terms of defending multilateralism and the rules-based international order. The new agreement will establish a robust institutional framework, which will help ensure maximum efficiency. The Security and Defence Dialogues will enable closer coordination on strategic priorities; there will be strengthened cooperation on crisis management and missions and operations under the Common Security and Defence Policy; cooperation on maritime security and cybersecurity will be reinforced; and coordination on emerging and disruptive technologies such as artificial intelligence will be facilitated. Coordination in multilateral and regional forums will also be strengthened, and the EU and Australia will be able to deepen their cooperation in response to evolving security challenges through a flexible and forward-looking approach.
Vice-President Kaja Kallas noted that “Australia and Europe are oceans apart, but security in Europe and Australia is closely linked. (...) With the new agreement, we will conduct joint exercises, share intelligence, strengthen resilience against cyber and hybrid threats, and deepen cooperation from crisis response to maritime security.”
Read the news about the new agreements on the European Commission website
Joint statement by Ursula von der Leyen and Anthony Albanese
Speech by President von der Leyen to the Australian Parliament
Relevant information on the EU-Australia FTA
