EU, Australia Strike Landmark Free Trade Deal

TDT | Manama

Email : editor@newsofbahrain.com

EU, Australia Seal Free Trade Deal, Boost Defence and Rare-Earth Cooperation

The European Union and Australia have finalized a long-awaited free trade agreement, alongside plans to strengthen defence ties and cooperation on critical raw materials, amid growing global trade uncertainty.

The agreement was announced during a visit by European Commission President Ursula von der Leyen to Australia. The deal comes as both sides seek to address renewed energy and economic vulnerabilities linked to the ongoing Middle East conflict.

The pact marks another step in the EU’s broader strategy to diversify trade partnerships as it navigates economic challenges involving major global players such as the United States and China.

Key Trade Breakthroughs

After nearly eight years of negotiations, both sides resolved major disputes, including the use of European geographical product names and beef export quotas.

Australian producers will be allowed limited use of names such as feta and gruyere under specific conditions.

Winemakers in Australia can continue using the term “prosecco” domestically but must phase it out for exports within 10 years.

The EU will significantly increase its quota for Australian beef imports—more than tenfold over the next decade.

European carmakers will benefit as Australia raises the threshold for luxury car tax exemptions on electric vehicles, with around 75% expected to qualify.

Defence and Strategic Cooperation

Beyond trade, both sides agreed to deepen defence collaboration and strengthen supply chains for rare-earth minerals—key components in modern technologies.

Addressing Australia’s parliament, von der Leyen highlighted the shifting global landscape, describing it as “brutal, harsh and unforgiving,” and emphasized the need to reduce dependence on single suppliers.

“We cannot be over dependent on any supplier for such crucial ingredients,” she said, stressing the importance of cooperation between the EU and Australia.

Global Reactions

China responded to the agreement with caution. A spokesperson for its foreign ministry urged the EU to avoid “zero-sum thinking” and called for a balanced approach to global trade relations.

Mixed Reactions from Farmers

While officials described the deal as balanced and beneficial, agricultural groups expressed dissatisfaction.

Australia’s National Farmers’ Federation criticized the agreement as disappointing, while European farming group Copa-Cogeca also raised concerns over concessions made during negotiations.

Despite the criticism, the EU expects its exports to Australia to increase by roughly one-third over the next decade under the new agreement.