This morning in Canberra, Ursula von der Leyen and Anthony Albanese put an end to eight years of negotiations. The EU-Australia Free Trade Agreement is concluded. A security and defence partnership has been signed in parallel. And formal negotiations are opening to associate Australia with Horizon Europe, the world's largest research and innovation programme.
From Perth, where I am accompanying French companies establishing themselves in Western Australia, I appreciate what this day represents. Not a thunderclap (the signals have been clear for months), but a turning point. The legal framework that was missing is now in place. The question is no longer whether Australia is a relevant market for European companies. It is. The question is who will move first.
What this agreement really contains
The figures first, because they speak for themselves. Australia has a GDP of 1.7 trillion euros, the 14th largest economy in the world. The EU already exports 37 billion euros of goods (2025) and 31 billion of services (2024) there. Bilateral trade in goods totals 49.4 billion euros, with a European surplus of 28 billion. European investment stocks in Australia exceed 120 billion euros. This is not a marginal market. It is a major trading partner.
The agreement will eliminate tariffs on almost all European exports (with the exception of certain steel products). Specifically: 97.6% of European products will have zero tariffs from the date of entry into force, with the remainder phased in over a maximum transitional period of five years. Annual savings for European businesses will exceed one billion euros in tariffs. EU goods exports to Australia are expected to grow by 33% over the next decade, reaching an additional 17.7 billion euros per year. European investment flows into Australia could increase by more than 87%.
Among the sectors with high growth potential: dairy products (+48%), motor vehicles (+52%), chemicals (+20%). These are not abstract projections. These are the estimates from the European Commission, based on the analysis of comparable agreements.
Critical raw materials: the strategic core
This is where the agreement takes on its most tangible geopolitical dimension. Western Australia produces 53% of the world's lithium, 28% of bauxite (aluminium), and 16% of manganese. It has significant reserves of cobalt, tantalum, and nickel. Europe is 100% dependent on imports for lithium, 99% for tantalum, and 96% for manganese. In a context where China is imposing export restrictions and global supply chains are being strained by geopolitical tensions (the war in the Middle East, the Russian invasion of Ukraine), securing access to these materials is not a luxury. It is a necessity.
The agreement addresses this structurally: reduction of customs tariffs on critical raw materials (and on products derived from them), prohibition of export monopolies, export taxes and quantitative restrictions, opening of investments with a right of establishment without discrimination for European companies, and a rebalancing mechanism in case of double pricing by Australia. The Australian market for critical raw materials is becoming more predictable, more stable, and more accessible. For French companies in the mining, processing, battery industry, or defence sectors, this is a paradigm shift.
Services, mobility, public procurement
Beyond goods, the agreement opens the Australian services market in key sectors: financial services, telecommunications, maritime transport, business services. European investors will benefit from the most favourable treatment granted to any foreign investor in Australia (and in most cases, the same treatment as Australian investors).
The provisions on mobility deserve attention. The agreement provides for annual entry quotas of 2,000 researchers and 1,000 European trainee engineers. Managers and specialists seconded by European companies to their Australian subsidiaries (as well as their families) will benefit from advanced provisions. European professionals will be able to provide certain services in Australia for periods of up to six months, with specific placements lasting up to four years.
In terms of public procurement, Australia is opening access to around sixty new entities at the federal and state levels. A clause ensures that European SMEs will not be discriminated against when Australia grants preferential treatment to local SMEs. This is an important detail considering the size of the Australian public procurement market.
Agri-food and geographical indications: the compromise
The EU has a trade surplus of 2.3 billion euros with Australia in agri-food. The agreement eliminates all customs duties on European agri-food exports to Australia: wines and sparkling wines (from day one), chocolates, confectionery, ice creams, pasta, fruit and vegetable preparations, spirits (also from day one), cheeses (over three years). For French cheesemakers exporting 249 million euros to Australia with current duties of around 11%, this represents a direct saving of 20 million euros per year.
On sensitive products, the compromise is calibrated. Australian beef will enter the EU through two tariff quotas totalling 30,600 tonnes, with a gradual increase over ten years and a condition of "grass-fed" for 55% of the volumes. This represents about 0.5% of European beef consumption. Sheep and goat meat: 25,000 tonnes at zero duties, exclusively "grass-fed", phased over seven years. Sugar: 35,000 tonnes of raw cane sugar, which is less than 0.3% of European consumption. Bilateral safeguard mechanisms will allow the EU to act in case of market disruption.
As for geographical indications, the agreement will protect 165 food GIs and 231 GIs for spirits in Australia (Comté, Irish Whiskey, Queso Manchego, Parmigiano Reggiano, Salam de Sibiu, Lübecker Marzipan, among others). A modernised agreement on wines will protect over 1,600 European wine designations, with the addition of around fifty new GIs from 12 member states. Prosecco? Australian producers will have to stop using this name for export after a ten-year transitional period (but can continue to use it domestically as a grape variety name, with strict labelling rules). For Feta and Gruyère, bona fide Australian users who have used these terms for at least five years will retain the right to use them, with enhanced labelling disciplines.
It must be acknowledged that this is a compromise. Purists of protected designations of origin will find grounds for debate. But in a market where these terms have been used without any protection for decades, this is a significant step forward.
Security, defence and the geopolitical signal
The trade agreement does not come alone. The EU-Australia Security and Defence Partnership, signed on March 18 by Kaja Kallas and the Australian Ministers for Defence and Foreign Affairs, establishes a robust institutional framework: security and defence dialogues, cooperation on crisis management and CSDP missions, maritime security, cybersecurity, hybrid threats, emerging technologies (including artificial intelligence), space security, non-proliferation.
This is not anecdotal. Australia is investing heavily in its defence (over 159 billion AUD in naval construction over ten years, according to budget projections). The interconnection between security in Europe and the Indo-Pacific is becoming increasingly evident every day. For French companies in the defence and aerospace sector, this partnership opens up industrial cooperation prospects that go beyond the traditional commercial framework.
Sustainability: binding commitments
The Trade and Sustainable Development chapter of the agreement incorporates the European approach of "trade agreements for green and fair growth." Commitments on the Paris Agreement and the ILO's core labour standards are legally binding and enforceable through the general dispute resolution mechanism. In the case of serious violations, trade sanctions may be imposed as a last resort. This is a first in an EU trade agreement at this level of ambition.
The agreement liberalises trade in green goods and services from day one of its implementation: renewable energies (wind turbine towers, solar panel components), high energy efficiency products, electric batteries. A dedicated article on trade and gender equality (another first for a European trade agreement) commits the parties to implement the relevant UN and ILO conventions. Civil society is involved in monitoring the implementation of the entire agreement.
Timeline and next steps
The negotiated texts will be published soon. They will go through the EU's internal procedures before being presented to the Council. After adoption by the Council, the EU and Australia will sign the agreement. The text will then be sent to the European Parliament for approval. After the Parliament's consent and ratification by Australia, the agreement can come into force. This process will likely take several months, if not a year or more.
It is precisely this interim period that constitutes the window of opportunity. Companies that position themselves now (identifying partners, understanding the regulatory framework, structuring their presence) will have a decisive advantage when the agreement comes into force. Those who wait for everything to be in place will arrive after the others.
To learn more:https://ec.europa.eu/commission/presscorner/detail/da/ip_26_645
What Confluence Pacific can do for you
Based in Perth, we support French companies in their establishment in Western Australia. Strategic monitoring, identification of local partners, project structuring, operational support on the ground. If the EU-Australia agreement opens up opportunities for your business, let's talk.
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