The European Union and Australia signed a free trade agreement at Australia’s Parliament House on Tuesday, endorsing the final text of a pact that has taken more than two years to reach agreement after negotiations first broke down. European Commission President Ursula von der Leyen and Prime Minister Anthony Albanese both tied the breakthrough to a broader effort to diversify trade and reduce exposure to tariff-related uncertainty.
Von der Leyen said in remarks to reporters that the agreement comes as major powers use tariffs and treat supply chains as vulnerabilities. She said the pact’s message was that rules-based trade can produce positive outcomes, and that trust matters more than transactions.
Albanese said the context in which the talks resumed was a factor in allowing negotiations that collapsed in October 2023 to restart. He described the deal as a shared assertion of belief in free and fair trade, and said that trade advances prosperity for both sides.
Alongside the trade agreement, the leaders announced a new defense partnership designed to bring the EU and Australia closer on military cooperation. Albanese said the partnership would create a framework for collaboration on global challenges and identify areas including defense industries, maritime security, cyber security, countering terrorism and combating “hybrid threats such as disinformation.”
Albanese also said the defense partnership included reaffirming support for Ukraine in the face of Russia’s “illegal full-scale invasion.” He said the leaders’ announcements also included tariff removals for key Australian exports, including wine, seafood and horticulture.
Under the trade deal, the EU will open two tariff-rate quotas for Australian red meat totaling 30,600 metric tons, with 55% of that duty free. The agreement also includes rules for branded products: Australian producers of prosecco, described as a sparkling wine traditionally from northern Italy, will be banned from using the name on exports 10 years after the pact takes effect.
The full text of the agreement had not yet been released at the time of the announcement, and the leaders did not give a start date for when the pact would take effect. An economist, Hazel Moir of the Australian National University’s Center for European Studies, said it was “too soon” to predict the impact on bilateral trade because the final terms had not yet been published.
Moir said the shift in negotiations reflected changes in U.S. tariff behavior that made both sides “got nervous and they wanted to do other things.” She pointed to Donald Trump’s push for global tariffs as the trigger for renewed urgency on both sides.
The EU also said it has a separate free trade deal with four South American countries scheduled to begin May 1 after more than a quarter-century of negotiations, as global economic uncertainty continues to shape trade planning.