The European Union and Australia have signed a free trade agreement (FTA) after almost 10 years of negotiations.

The FTA final text was agreed during a leaders’ meeting in Canberra between European Commission President Ursula von der Leyen and Prime Minister of Australia Anthony Albanese.

The agreement will remove over 99% of tariffs on EU goods exports to Australia, cutting some €1 billion a year in duties for companies of all sizes.

According to the EU Commission, EU exports are expected to grow by up to 33% over the next decade under the deal, with export value reaching up to €17.7 billion annually.

The commission identified "key sectors with strong growth potential", including dairy which is expected to increase by up to 48%, motor vehicles (52%), and chemicals (20%).

Trade agreement

The commission said the deal will allow the EU to reinforce its strategic interests in the area of critical raw materials, "making EU supply chains stronger and more resilient against geopolitical shocks".

"The FTA also includes strong sustainability commitments, which will contribute to greener and fairer trade, and ensures that imports into the EU are more aligned with the EU’s own production standards on climate, environmental and animal welfare," the commission added.

"The EU and Australia may be geographically far apart but we couldn’t be closer in terms of how we see the world," President von der Leyen said.

"With these dynamic new partnerships on security and defence, as well as trade, we are moving even closer together," she added.

Agri-food

The agreement will eliminate tariffs on major EU exports such as cheeses, meat preparations, wine and sparkling wine, some fruits and vegetables including preparations, chocolate, and sugar confectionary.

For some "sensitive products", access to the EU market will be "limited through carefully calibrated tariff rate quotas" which will be "gradually implemented".

For beef, the EU will open two tariff rate quotas for Australian farmers totalling 30,600t, with 55% entering duty-free and subject to a 'grass-fed' conditionality.

The remaining 45% or 13,770t is to be imported with a reduced duty of 7.5%.

These volumes will be gradually phased in over 10 years from the entry into force of the agreement.

The commission said this represents around 0.5% of EU domestic consumption of beef and less than 2% of all Australian exports of beef to the world.

It is understood that Australian farmers had sought a 50,000t preferential quota for beef.

For dairy, the commission said "the most sensitive EU products will be protected by modest tariff rate quotas", including 8,000t for skimmed milk powder, 5,000t for butter, and 2,000t for whey protein concentrates.

The EU will open two tariff rate quotas for sheep and goat meat of a total of 25,000t to be imported duty-free, with a smaller portion (27%) limited to frozen meat.

This represents around 4% of EU consumption of sheep and goat meat.

This volume will be gradually phased in over seven years from the entry into force of the agreement.

The commission said these quotas will be exclusive for 'grass-fed' sheep and goat meat, not raised in feedlots, with higher costs of production and higher sustainability credentials.

Under the agreement, the EU will open a tariff rate quota of 35,000t of raw sugar cane for refining to be imported duty-free.

The agreement will protect 165 agricultural and food geographical indications (GIs) and 231 spirit drink GIs, including Irish Whiskey.

Safeguards

EU Commissioner for Agriculture and Food  Christophe Hansen noted that the EU currently has a trade surplus of over €2 billion with Australia in agri-food products.

"This agreement will guarantee our producers full, duty-free access to the Australian market, enabling us to increase exports to a population that appreciates high-quality European products," he said.

The commissioner acknowledged the "concerns of certain agricultural sectors", adding that the deal includes "robust safeguard measures for the agri-food sector".

The EU can impose safeguard measures in case of a surge in EU agri-food imports from Australia "when it causes or threatens to cause a serious injury to EU industry". 

"No agri-food products from Australia will enter the EU without respecting all the EU’s high health and safety standards. These measures are non-negotiable," the EU Commission said.

The EU recently announced a reinforcement of controls on food, animal and plant products entering the EU, increasing the number of audits carried out on non-EU countries by 50%, and those carried out on EU Border Control Posts by 33% in 2026-2027.

Australia

Negotiations for an FTA between the EU and Australia started in July 2018.

However, in late 2023, discussions stalled due to disputes over agricultural market access and geographical indications.

The deal is the latest addition to the EU’s agreements in the Indo-Pacific region, following the conclusion of negotiations with Indonesia in September 2025, and India in January 2026.

EU Commissioner for Trade and Economic Security Maros Sefcovic said the agreement between the EU and Australia "could not come at a better time".

"Our trade already sustains 460,000 European jobs, just imagine the potential, with EU goods exports expected to grow by 33% over the next decade," he said.

The commission will now put the proposal to the European Council for the signature and conclusion of the agreement.

The trade agreement requires the European Parliament's consent, and the council's decision on conclusion for it to enter into force. Once Australia also ratifies the agreement, it can enter into force.