The EU and Australia are strengthening their ties through a trade and security and defence partnership agreement

The EU and Australia have announced the launch of an innovative Security and Defence Partnership. They have also concluded negotiations on an ambitious and balanced free trade agreement (FTA) and agreed to launch formal negotiations on Australia’s participation in Horizon Europe, the world’s largest research and innovation funding programme. Through these measures, the EU and Australia are seeking mutually beneficial outcomes and further strengthening their already close relations against a backdrop of geopolitical uncertainty.

The final text of the FTA was agreed during a leaders’ meeting in Canberra between the President of the European Commission, Ursula von der Leyen, and the Prime Minister of Australia, Anthony Albanese. The Security and Defence Partnership (SDP) was signed virtually by the High Representative and Vice-President, Kaja Kallas, Australia’s Deputy Prime Minister and Minister for Defence, Richard Donald Marles, and the Minister for Foreign Affairs, Penny Wong, on 18 March 2026.

Presidentvon der Leyenstated:“The EU and Australia may be geographically distant, but our worldview is unwavering. With these new and dynamic partnerships on security, defence and trade, we are drawing even closer together. These agreements establish lasting structures, based on trust, to support peace and security through strength; they drive prosperity through rules-based trade and work together to defend global institutions. We are committed to building a cleaner, digital future for our citizens, workers and businesses. And we are sending a clear message to the rest of the world: friendship and cooperation are what matter most in times of uncertainty.”

Security and Defence Partnership

The EU and Australia are long-standing allies and partners, and share a common global vision when it comes to defending multilateralism and the rules-based international order.

As the interconnection between security in Europe and the strategically important Indo-Pacific region becomes increasingly apparent, the value of closer cooperation is abundantly clear to both sides.

Building on the existing strong engagement at the level of leaders and ministers, and supported by a robust network of expert cooperation, the SDP will establish a robust institutional framework that will help ensure maximum efficiency in addressing current geopolitical challenges:

• Security and defence dialogues will enable greater coordination on strategic priorities, translating shared values and interests into practical cooperation;
• Strengthening cooperation on crisis management and on Common Security and Defence Policy missions and operations, including exercises, training and capacity-building;
• Improving cooperation on maritime security, cybersecurity, countering hybrid threats and foreign information manipulation and interference, reflecting the changing nature of contemporary security challenges;
• Facilitate close coordination on emerging and innovative technologies, including artificial intelligence, as well as on space security, non-proliferation and disarmament;
• Strengthen exchanges on situational awareness in different regions;
• Support capacity building for partners, including in the Indo-Pacific, and strengthen coordination in multilateral and regional forums; and
• Enable the EU and Australia to deepen their cooperation over time in response to constantly evolving security challenges, through a flexible and forward-looking approach.

A balanced and ambitious free trade agreement

With the conclusion of negotiations for an ambitious and balanced free trade agreement (FTA), the EU is opening its market to one of the world’s fastest-growing developed economies, thereby offering significant economic opportunities to European businesses, consumers and farmers. 

EU exports are expected to grow by up to 33% over the next decade, reaching a value of up to €17.7 billion annually. Key sectors with strong growth potential include dairy products (with an expected increase of up to 48%), motor vehicles (52%) and chemicals (20%). EU investment in Australia has a growth potential of over 87%.

With this agreement, the EU is bolstering its strategic interests in critical raw materials, thereby strengthening its supply chains and making them more resilient to geopolitical crises. The FTA also includes significant sustainability commitments, which will contribute to greener and fairer trade, and ensure that imports into the EU are better aligned with EU production standards on climate, the environment and animal welfare.

Following the recently concluded agreements with Indonesia and India, this agreement further diversifies the EU’s network of trading partners in the strategically important Indo-Pacific region and strengthens Europe’s position on the global stage.  

Opening up business opportunities for European companies

The agreement will grant EU exporters privileged access to the Australian market, including:  

• Removing more than 99% of tariffs on EU exports to Australia, resulting in savings of around €1 billion a year in tariffs for businesses of all sizes;
• Opening up the Australian services market in key sectors, including financial services and telecommunications;
• Facilitating greater access to Australian government procurement contracts for EU companies;
• Establishing ambitious rules on data flows that prohibit data localisation requirements; and
• Securing supply chains for critical raw materials (CRMs) by reducing import tariffs and opening up investment opportunities.

Furthermore, to ensure that small businesses also benefit from the agreement, it includes a specific chapter on small and medium-sized enterprises to help them increase their exports. 

The agreement will also make it easier for EU professionals to work in Australia, whilst entry quotas for engineers and researchers will boost European and Australian innovation. 

Boosting EU agri-food exports and protecting EU sensitivities.  

The EU has a positive trade balance with Australia in the agri-food sector, worth €2.3 billion in 2024. The agreement will remove tariffs on key EU exports, such as cheese, meat preparations, wine and sparkling wine, certain fruit and vegetables (including preparations thereof), chocolate and confectionery.

The agreement takes into account the interests of EU agricultural producers. For sensitive agricultural sectors such as beef, sheep and goat meat, sugar, certain dairy products and rice, the agreement will allow imports from Australia at zero or reduced tariffs only in limited quantities, through carefully calibrated tariff quotas.  

Furthermore, the agreement includes a bilateral safeguard mechanism that allows the EU to take measures to protect sensitive European products and their producers in the unlikely event that a sudden surge in imports from Australia causes harm to the EU market. As an additional safeguard for farmers, the bilateral safeguard mechanism will be implemented through a separate EU regulation that will trigger rapid and effective protections in the unlikely event of a sudden and harmful surge in imports or an undue fall in prices for EU producers.

Furthermore, the Agreement will protect 165 agricultural and food Geographical Indications (GIs), as well as 231 GIs for spirits, including some of the best-known, such as Comté, Irish whisky, Manchego cheese, Sibiu salami, Istarski pršut ham, Lübeck marzipan and Chiou mastic.  

The EU and Australia have also agreed on a modernised bilateral wine agreement, which updates the full list of EU wine Geographical Indications (GIs) and protected traditional terms in Australia. Building on the success of the previousagreement, it will offer protection for all EU wine GIs (representing 1,650 names), including the addition of 50 new wine GIs from 12 different Member States.    

Securing access to critical raw materials  

Australia is a major producer of raw materials, such as aluminium, lithium and manganese, which are essential to the EU’s economic security and competitiveness. Demand for critical raw materials (CRMs) is expected to rise significantly, and the EU remains heavily reliant on imports.  

The agreement facilitates the EU’s access to Australia’s critical mineral resources, with specific provisions that make the market more predictable and reliable for EU companies. Furthermore, special provisions on the environment and safety will ensure that these critical mineral resources are extracted sustainably.  

Trade in agricultural raw materials is easily affected by sudden economic or geopolitical crises; therefore, trade agreements with reliable partners are essential to stabilise the EU’s supply.  

Ambitious sustainability commitments  

The free trade agreement fully incorporates the EU’s high standards on trade and sustainable development (TSD), including ambitious commitments on workers’ rights, gender equality, the environment and climate.  

All SBT (Trade, Sustainability and Trade) commitments set out in the agreement will be enforceable through the agreement’s general dispute settlement mechanism. The agreement includes binding commitments on core labour standards and the Paris Agreement on Climate Change, as well as a specific chapter on sustainable food systems.  

The agreement also liberalises trade in green goods and services, such as renewable energy and energy-efficient products. 

Next steps in the FTA

On the EU side, the negotiated draft texts will be published shortly. These texts will undergo the necessary internal procedures before the Commission submits its proposal to the Council for the signing and conclusion of the agreement. Once approved by the Council, the EU and Australia will be able to sign the agreement. Following signature, the agreement requires the consent of the European Parliament and a Council decision on its conclusion before it can enter into force. Once Australia has also ratified the agreement, it may enter into force. 

Background

Negotiations for an FTA with Australia began in July 2018. The fifteenth and final formal round of negotiations took place in April 2023, followed by intersessional discussions at technical and political levels, culminating in the conclusion of negotiations on 24 March 2026. This agreement is the latest addition to the EU’s agreements with the strategic Indo-Pacific region, following the conclusion of FTA negotiations with Indonesia in September 2025 and with India in January 2026.

More information: European Commission.