European wine, chocolate, pasta and electric vehicles are set become cheaper after Anthony Albanese and European Commission President Ursula von der Leyen finalised terms on an elusive free-trade deal.
Tuesday’s breakthrough saw both sides agree to slash tariffs on goods across the board and officially closed curtains on eight years of negotiations.
“This is a significant moment for our nation as we secure an agreement with the world’s second largest economy,” the Prime Minister told a press conference at Parliament House.
“The Australia-European Free Trade Agreement will lower trade and investment barriers between Australia and the EU – a market of around 450 million people.
“This agreement is worth $10 billion to the Australian economy on an annual basis.”
Speaking alongside Mr Albanese, Ms von der Leyen shared his praise and spruiked the boons for Australia.
“This agreement is set to add almost $8 billion to your GDP,” she said.
“It will become easier for Australia to export to the European Union based on high standards.
“All Australian industrial goods exports to the European Union will become tariff free, and Australian citizens will have more opportunities to provide their high quality services to the European Union.”
The agreement, which needs parliamentary approval in both Australia and the EU, strips tariffs from 97.8 per cent of Australian goods bound for Europe, from produce and dairy to machinery and textiles.
It also massively boosts market access for Australian beef to 35,000 tonnes per year, marking a nearly 700 per cent increase on current exports.
Similarly, sheep meat producers will be able to export almost 31,000 tonnes per year to Europe, representing a five-fold increase.
In a major concession, Australia has agreed to respect 396 geographical indications – restricted product names of regional and cultural significance, such as prosecco, kransky and parmesan.
This bars New Australian producers from using these terms, while forcing existing producers to phase them out over time.
Some exceptions were negotiated for a handful of common product names, such as “feta” “gruyere”, if businesses can prove they have used the names “in good faith” for at least five years prior to the agreement entering force.
Australia has also agreed to create a luxury car tax carve-out for European electric vehicles under $120,000.
The 33 per cent levy has been blamed for hampering market access for European automakers in Australia.
In a boarder component, both sides agreed to make it easier for Australians and Europeans have their qualifications recognised, making it easier for people to secure migration pathways.
NewsWire understands this is a watered-down compromise on what the EU wanted.
‘Worst trade deal ever’
The Coalition has slammed the agreement, with opposition trade spokesman Matt Canavan declaring it “the worst trade deal ever” after farmers and other industry groups criticised quotas.
“A few years ago, the government walked away from the discussions with the EU on a free trade deal … and when they did so they said that they wouldn’t sign any deal, they would only sign a good deal,” he told reporters.
“They made a promise to Australian farmers that they would only sign a good deal, not any deal.
“Well, today, the government has broken that promise with Australian farmers because clearly they have signed any deal.”
Senator Canavan pointed to the National Farmers Federation, which claimed the red meat quotas would not give producers any meaningful access to the EU.
The NFF also warned European producers could now dump cheaper meat on Australia, despite EU meat exports already getting tariff-free access to Australia.
Meanwhile, the country’s sugar producers have decried the agreement a “horrendous outcome for Australia’s cane growers”.
“For the past decade we have made our needs abundantly clear to the Australian Government and they have not delivered,” Canegrowers chief executive Dan Galligan said, adding that there was “no growth, no pathway to expand access and effectively locks growers into a bad deal for the next generation”.
“It’s a capitulation to protectionist European sugar interests, plain and simple.”
The agreement secures an extra 35,000 tonnes of duty-free raw cane sugar after three years.
‘Trust matters more than transactions’
In their press conference, the leaders were clear that the agreement had been spurred by an increasingly chaotic world.
“Today we are telling an important story to a world that is deeply changing,” Ms von der Leyen said.
“A world where great powers are using tariffs as a leverage and supply chains as vulnerabilities to be exploited.
“In our story, open, rules based trade delivers positive sum outcomes. Trust matters more than transactions.
“It is the story of building strength at home and diversifying abroad through a reliable network of agreements that we respect and uphold. And this is what collective resilience is – this is our common story.”
Asked about US President Donald Trump’s global tariff assault, she said “countries are longing for stability and predictability” and that “this is what the European Union is offering”.
“And therefore it was basically an open door on both sides where we started our negotiations knowing that we want a situation where a free-trade agreement leads to a win-win situation for both sides,” she said.
“And this is what we are showing here – you can have a free-trade agreement and both sides are winning.”
Mr Albanese echoed her, saying that “we stand for free and fair trade”.
“And at a time where that is under some pressure globally as well, I think this agreement sends a message as well to the world that it is possible to stick to the rules, to engage in a way that benefits both of our nations,” he said.
It was with global uncertainty in mind that Mr Albanese and Ms von der Leyen also announced Australia would step up defence co-operation with the EU.
“The Partnership provides a framework to strengthen co-operation between Australia and our European friends so that we can best respond to pressing global challenges,” Mr Albanese said.
“It will bolster our collaboration on defence industry, maritime security, cybersecurity, countering terrorism and combating hybrid threats such as disinformation.
“And it shows our shared commitment to global peace and security, including reaffirming our steadfast support for Ukraine in the face of Russia’s illegal full scale invasion.”
Ms von der Leyen said both Brussels and Canberra “share a responsibility beyond our borders” and that “Europe’s security and Indo-Pacific stability are not separate conversations”.
“A crisis in the Indo-Pacific would crippled global trade, directly hitting European industries and growth,” she said in a thinly veiled nod to growing Chinese militarism.
“So, we have resolutely decided to step up co-operation on defence industry, counter-terrorism, space and maritime security, and we are joining forces to fight back against hybrid threats to our democracies because we are both confronted with disinformation and wide attempts to erode public trust.”
The announcement came as a major study from the Australian National University’s Security College found two in three Australians were worried about national security, with 68 per cent of participants expecting the country to be involved in a war by 2030.
