EU and Australia Seal Historic Free Trade Agreement to Secure Critical Raw Materials

The European Union and Australia signed a comprehensive free trade agreement in Canberra on Tuesday, March 24, 2026, eliminating more than 99 percent of tariffs on EU exports to Australia and saving European companies an estimated one billion euros annually in customs duties. European Commission President Ursula von der Leyen and Australian Prime Minister Anthony Albanese signed the deal after years of negotiations, capping a process that began when the EU launched talks in 2018. The agreement covers trade in goods and services, mutual investment, access to critical raw materials, and a new security and defense partnership. Alongside the trade deal, both sides announced closer cooperation on cyber risks, hybrid threats, and foreign information manipulation. The signing took place against a backdrop of global trade uncertainty, with both economies navigating the impact of tariffs imposed by U.S. President Donald Trump.

The EU and Australia began formal free trade negotiations in 2018. Talks suffered a significant setback in 2021 when Australia concluded the AUKUS security pact with the United States and the United Kingdom without informing the EU, a move that collapsed a multi-billion-euro contract for French-designed submarines and angered Paris. Negotiations stalled again in 2023, when a meeting in Osaka, Japan, failed to bridge differences over agricultural imports. The EU is Australia's third-largest trading partner after China and Japan, while Australia ranks only 20th among the EU's goods trading partners.

1 billion (euros) — Annual customs savings for European companies under the deal

The agreement's strategic core for Brussels is securing reliable access to critical raw materials held in abundance in Australia. Von der Leyen described Australia as "the world's largest lithium supplier" and said the deal would abolish tariffs on raw materials themselves as well as on processed products. The EU currently depends heavily on China for the majority of its raw material imports, and Brussels has made supply-chain diversification a central policy goal. The European Commission statement specifically cited aluminum, lithium, and manganese as materials of crucial importance for EU economic security and competitiveness. Von der Leyen framed the stakes directly before the Australian Parliament. „We must not become too dependent on a single supplier for such important raw materials, and that is exactly why we need each other.” (We must not become too dependent on a single supplier for such important raw materials, and that is exactly why we need each other.) — Ursula von der Leyen via N-tv The agreement also includes provisions to make the Australian market more predictable and reliable for EU companies investing in the raw materials sector.

Automotive and dairy sectors eye 50 percent export surge The EU projects its exports to Australia will grow by up to 33 percent over the coming decade, reaching 17.7 billion euros annually, with the sharpest gains expected in the automotive and dairy sectors. EU member states exported goods worth 37 billion euros to Australia last year, according to the Czech public broadcaster ČT24. The automotive sector is forecast to grow by 52 percent, dairy products by 48 percent, and chemicals by 20 percent. EU investments in Australia could increase by more than 87 percent under the deal, according to figures from Brussels. Hildegard Müller, president of the German Association of the Automotive Industry, said the agreement would open up significant opportunities for European carmakers competing against Chinese and Japanese rivals in the Australian market. According to VDA data, Germany exported just over 44,000 cars to Australia in the most recent year on record — more than to Portugal but fewer than to Norway. „In times of increasing isolationism and protectionism, the agreement sends a powerful signal for fair and rules-based trade.” (In times of increasing isolationism and protectionism, the agreement sends a powerful signal for fair and rules-based trade.) — Hildegard Müller via DIE WELT

Motor vehicles: 52, Dairy products: 48, Chemicals: 20, Total EU exports: 33

Ratification road runs through 24 languages and two parliaments Despite Tuesday's signing ceremony, the agreement will not enter into force immediately and faces a lengthy ratification process on both sides. The treaty text must first undergo a legal review, which typically takes several months, before it can be formally submitted for approval. Within the EU, the document must be translated into all 24 official languages and then approved by EU member states and the European Parliament. The Australian Parliament must also ratify the deal before it takes legal effect. The agreement additionally covers the opening of Australia's services market in financial services and telecommunications, improved EU access to Australian public procurement contracts, and entry quotas for engineers and researchers to strengthen innovation ties. Albanese underscored the economic significance of the deal for his country. „This is a significant moment for our nation as we secure an agreement with the world's second-largest economy.” (This is a significant moment for our nation as we secure an agreement with the world's second-largest economy.) — Anthony Albanese via N-tv Von der Leyen, speaking before the Australian Parliament, described the deal as "a fair agreement, one that serves your businesses and one that serves our businesses."