Australia–EU Seal Landmark Trade Deal After Eight Years of Negotiations

Australia and the European Union have signed a long-awaited trade agreement, marking a major milestone after eight years of negotiations. The deal eliminates tariffs on more than 99% of European goods exported to Australia and nearly all Australian critical mineral exports to the EU. European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese highlighted the pact as a step toward closer economic and strategic ties, particularly in reducing dependence on dominant suppliers like China for essential resources.

The agreement is expected to deliver significant economic gains, with EU companies saving around €1 billion annually in duties and exports to Australia projected to grow by up to 33% over the next decade. Albanese stated that the deal could add approximately A$10 billion annually to Australia’s economy. Additionally, Australia will raise the luxury car tax threshold for EU electric vehicles to A$120,000, allowing roughly 75% of such vehicles to enter the market tax-free, further boosting trade and clean energy collaboration.

However, the pact has drawn criticism from Australian farmers, as key agricultural exports such as beef and sheep meat will remain subject to quotas, limiting market access. Despite these concerns, the agreement also strengthens security and defence cooperation between the two partners and reflects Europe’s increasing engagement in the Indo-Pacific region, following similar trade agreements with countries like India and Indonesia.

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