Australia has secured a free trade agreement (FTA) with the European Union (EU) after eight years of negotiations, opening new avenues for Australian exporters to sell to 450 million consumers in the EU’s $30 trillion economy.
The EU was Australia’s third largest two-way trading partner and second largest source of total foreign investment across FY 2024-25, with total investment stock worth $869.3 billion. The new agreement will result in 98 per cent of the current value of Australia’s exports entering the EU duty free.
Negotiations for the Australia-European Union Free Trade Agreement (A-EU FTA) began in July 2018, with the last round taking place in April 2023. Advocacy organisations across Australia raised issues with many aspects of the proposed agreement at the time, specifically in regard to the protection of agricultural and food geographical indications (GI) such as feta, parmesan, and prosecco.
Following a three year break from discussions, Prime Minister Anthony Albanese and President of the European Commission (EC), Ursula von der Leyen, announced the conclusion of negotiations on 24 March 2026 – driven by renewed political momentum to diversify trade, amidst rising global trade uncertainty.
A joint statement by Albanese and von der Leyen said the agreement will strengthen bilateral trade and investment, support economic growth, and reinforce the shared commitment of Australia and the EU to open and rules-based trade. The new Australia-European Union Security and Defence Partnership was also announced and put into effect, strengthening cooperation across defence industry, cyber, economic security, counter-terrorism, and countering hybrid threats.
According to the EC, the A-EU FTA will protect 165 agricultural and food, 231 spirit drink, and all 1650 EU wine GIs – meaning Australian producers will be unable to use those terms to describe their products.
The federal government release stated that the right of Australians to continue using well-known terms such as parmesan, kransky and prosecco has been protected, while grandfathering and lengthy phase-out periods have been secured for a limited number of terms such as feta, romano and gruyere.
The draft text of the A-EU FTA will be published shortly, undergo legal checks, and be translated into the 24 official languages of the EU to be approved by the European Council. Australia will undertake domestic processes, such as approval from the Federal Executive Council, before both parties can sign the agreement – expected to occur in late 2026/early 2027.
Minister for Trade and Tourism, Don Farrell, said the deal delivers real commercial gains for Australian exporters, farmers and producers into a market that has been difficult to enter, or effectively closed, for decades.
“The removal of EU tariffs on most of Australia’s exports gives Australian exporters the opportunity to diversify trade with 27 European countries and 450 million consumers,” said Farrell.
“This is a strategically important and economically valuable agreement at a time when Australian exporters are navigating choppy trade waters. More trade, with more trading partners means more supply chain security, more well-paying jobs, cheaper prices, and more national income to build things like urgent care clinics and improve government services.”
Highs and lows
According to the federal government, highlights of the A-EU FTA include;
- Australian farmers and producers will benefit from the elimination of almost all European Union tariffs on agricultural products – including wine, nuts, fruit and vegetables, honey, olive oil, most dairy products, wheat and barley, and seafood.
- For other important agricultural products, the agreement delivers commercially meaningful access through new or expanded tariff rate quota volumes, including for beef, sheep meat, sugar, rice, wheat gluten, skimmed milk powder and natural butter.
- Almost all Australian exports of manufactured goods and mineral resources will face zero import tariffs into the European Union, including critical minerals and hydrogen.
- Australian companies, including small and medium-sized enterprises, will have better access to bid for lucrative European government contracts, worth around $845 billion annually.
- Australian service providers will have greater market access to the European Union, including in financial services, education, tourism and communications.
- Australian professionals will be able to travel to the European Union more easily and will benefit from streamlined recognition of their Australian qualifications.
Industry bodies including the Australian Industry Group and Business Council of Australia (BCA) welcomed the new agreement.
BCA chief executive, Bran Black, said at a time of heightened global uncertainty and disrupted supply chains, agreements like this are more important than ever.
“With one in four Australian jobs dependent on trade, continuing to build on that success is critical to driving growth, investment and better living standards for all Australians,” said Black.
“For Australian businesses of all sizes, this means fewer barriers, lower costs and more customers – making it easier to export, invest, scale and partner in global supply chains.”
However, organisations across the Australian agrifood sector expressed strong displeasure with the terms of the A-EU FTA. The National Farmers’ Federation said the FTA appears to offer no material change for key agricultural commodities since Australia last walked away from negotiations.
The meat sector has been particularly outspoken about the FTA, both during negotiations in 2023 and in finalisation of the agreement. The Australian Meat Industry Council (AMIC) and Meat & Livestock Australia (MLA) stated the FTA had let the sector down, with MLA describing it as the “worst ever free trade agreement for Australian red meat industry to date”.
AMIC CEO, Tim Ryan, said the volumes and conditions attached to beef, sheep and goat meat under the deal limits, rather than supports, trade to the EU – resulting in a permanent competitive disadvantage for Australian meat to the EU.
“When it comes to red meat, the final package locks in and solidifies the long-standing access imbalance faced by Australian exporters to the EU,” said Ryan.
“We have been clear that this agreement represented a once-in-a-generation opportunity to reset red meat access to the EU in a way that would shape trade for decades to come. This outcome does not reflect the contribution of the red meat sector to Australia’s economy or export profile.”
As the EC put it, the agreement takes into account the interests of EU agricultural producers.
“For sensitive agricultural sectors such as beef, sheep and goat meat, sugar, some dairy products and rice, the agreement will allow zero or lower tariff imports from Australia only in limited amounts, through carefully calibrated Tariff Rate Quotas,” the EC release stated.
“In addition, the agreement includes a bilateral safeguard mechanism allowing the EU to take measures to protect sensitive European products and their producers in the unlikely event of a surge in imports from Australia causing injury to the EU market.”
For consumers, the A-EU FTA will offer lower prices on EU imports such as European wine, spirits, biscuits, chocolates, and pasta. But for Australian agrifood exporters and producers of now protected items, such as feta, the new agreement may be difficult to swallow.
