Commission President Ursula von der Leyen is expected to travel to Australia later this month to seal another major trade and security agreement. If succesfully done, deal with Australia will mark an important success for the EU shortly after similar agreements have recently been concluded with South American countries (Mercosur) and India.
Given the growing problems in relations between Europe and the United States, the EU has begun to look more intensively for closer trade with other partners. Judging by recent moths, these efforts seem to be paying off. A major trade agreement with Australia is imminent.
Agriculture a chief sticking point, again
Trade negotiations between Brussels and Canberra are nothing new. Talks on removing or easing trade barriers have been going on for many years, but reached an impasse in 2023 due to disagreements over quotas on beef and lamb.
As with the recently concluded agreement with Mercosur, also in the Australian case the biggest problem remains the market for selected agricultural products. The Mercosur deal has already met furious opposition from European farmers, who fear unfair competition from increased imports coming from Latin America. A few days ago, MEPs referred the Mercosur trade agreement to the European Court of Justice, potentially delaying full implementation by months. The Union will apparently try to ensure that this does not happen again.
Šefčovič first, von der Leyen to follow
Next week, Commissioner for Trade and Economic Security Maroš Šefčovič and his Australian counterpart Donald Farrell are expected to hold trade talks in Brussels. This meeting was confirmed by Commission deputy chief spokesperson Olof Gill. Mr Gill, however, did not yet confirm Ms von der Leyen’s trip to Australia. “The EU is committed to strengthening relations with Australia, a strategic and like-minded partner. As always, progress in the sensitive phase of negotiations will depend on substance,” spokesperson said.
The EU is committed to strengthening relations with Australia, a strategic and like-minded partner. – Olof Gill, Commission deputy chief spokesperson
From this statement, it appears that Mr Šefčovič and Mr Farrell will first attempt to resolve the remaining disagreements. Only if they succeed will Commission President travel to sign the deal.
The trade agreement with Australia would represent a major win for the EU also in terms of strategic minerals. Australia has vast reserves of these valued substances. That includes lithium (needed for the production of electric batteries), copper, and more.
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Ample space for business expansion
According to Commission’s official data, the trade relations between the EU and Australia remain relatively modest so far. At least from the European perspective. In 2024, Australia ranked as the EU’s 20th biggest partner for trade in goods, accounting for just 1 per cent of the EU’s total trade. Seen from Australia, however, the picture looks differently: the EU was Australia’s third-largest trading partner after China and Japan (with 8.6 per cent of the total).
The EU’s goods imports from Australia mainly comprised mineral products and vegetable products. Its main exports to Australia consisted of machinery and appliances, transport equipment, and chemicals.
In 2024, the stock of EU foreign direct investment in Australia amounted to €122.8bn and the stock of Australia’s investment in the EU was €25.2bn.
