After eight years of negotiations, 15 rounds of talks and one suspended negotiation in 2023, Australian Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen signed a long-awaited free trade agreement in Canberra at the beginning of last week.
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The deal marks another win for Brussels as it races to diversify trade ties and lock in strategic partners amid rising global tensions.
“Australia and Europe are friends and partners, working together to advance peace, security and economic prosperity,” the Australian prime minister said in a statement after inking the deal.
Both sides will be looking to build on the billions of euros worth of goods that already flowed between Australia and the EU even before the agreement came into force.
In 2025, the EU exported €36.9 billion in goods to Australia, while imports stood at €10.2 billion.
This left the bloc with a trade surplus of €26.7 billion, according to the latest Eurostat data.
Both exports and imports dipped slightly compared to 2024, down 4.9% and 4.8% respectively.
However, over the longer term, trade has grown significantly. Since 2015, exports have risen by nearly 40%, and imports by almost 50%.
The EU’s top exports to Australia were medicinal and pharmaceutical products, making up 13.1%, followed by road vehicles at 11.1%, and industrial machinery at 9.5%.
On the import side, coal, coke and briquettes dominated, accounting for 29% of all imports. These were followed by oilseeds and oleaginous fruits at 15.3%, and gold at 7.2%.
What will the trade look like moving forward?
The trade between the EU and Australia is expected to grow by up to 33% over the next decade, with export value expected to reach up to €17.7 billion annually, according to the European Commission.
“The EU is opening the market to one of the world’s fastest-growing developed economies and thereby bringing significant economic opportunities to European companies, consumers and farmers,” a press release from the European Commission noted.
Some key sectors for the EU include dairy (expected to increase by up to 48%), motor vehicles (52%), and chemicals (20%).
In addition, under the deal, more than 99% of tariffs on EU exports to Australia will be eliminated — saving businesses around €1 billion a year.
The EU also reinforces its strategic interests in the area of critical raw materials as Australia is a major producer of raw materials, including aluminium, lithium and manganese, which are vital for the EU’s overall economic security and competitiveness.
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