Von der Leyen clinches Australia trade deal

EU and Australia Sign Strategic Trade Agreement

European Commission President Ursula von der Leyen Concludes Deal with Australia

European Commission President Ursula von der Leyen finalized a trade agreement with Australia on Tuesday, securing reduced import duties on most European goods and agricultural exports. The pact comes as the EU intensifies efforts to broaden its trade alliances and secure strategic partners in a shifting global landscape. The agreement is expected to generate annual savings of €1 billion for the bloc, with projections indicating a potential 33% rise in exports over the next ten years. Agriculture emerged as a central issue during negotiations, with EU farmers previously opposing the Mercosur trade deal. A legal challenge from European lawmakers threatened to delay the agreement’s ratification. Under the new terms, tariffs will gradually decline to zero on items such as cheese, wine, select fruits and vegetables, chocolate, and processed foods within three years. For beef and sheep, which stalled discussions in 2023, Australia agreed to annual import limits of 30,600 and 25,000 tonnes, respectively. A safeguard clause will empower the EU to protect vulnerable industries if Australian imports disrupt the market. Beyond agriculture, the deal grants the EU access to Australia’s key raw materials, including aluminium, lithium, and manganese. Despite calls to eliminate the luxury car tax, the EU will exempt 75% of its electric vehicles from the levy. The Commission anticipates substantial growth in exports, particularly in dairy (up to 48%), motor vehicles (52%), and chemicals (20%). A security and defense collaboration with Australia was also announced, signaling a deeper strategic bond. “The EU and Australia may be geographically far apart, but we couldn’t be closer in how we perceive global challenges,” von der Leyen stated in a

“With these new partnerships in trade and security, we are strengthening our alignment.” The agreement reflects the EU’s growing emphasis on geostrategic trade ties, especially after Donald Trump’s return to power in 2025. Since then, Brussels has prioritized diversifying its market reach, including agreements with Mexico, Switzerland, and Indonesia. The Mercosur pact, signed earlier this year, will enter provisional application on May 1 despite ongoing legal disputes. Talks with the Philippines, Thailand, Malaysia, the UAE, and African nations remain active, as von der Leyen highlighted to EU ambassadors on March 9.