The European Union and Australia have concluded negotiations in Canberra on a multi-billion-euro free trade agreement expected to increase EU exports to Australia by 33% over the next decade. Alongside trade liberalization, the deal deepens cooperation on security and defence, establishing an institutional framework to strengthen bilateral ties in these areas. The agreement was formalised by Ursula von der Leyen and Australian Prime Minister Anthony Albanese, with EU Trade Commissioner Maroš Šefčovič also present in Canberra.
Positioned within the EU’s broader strategy to diversify trade partnerships following the political return of Donald Trump, the agreement follows recent deals with Mercosur, India, and Indonesia.
TRADE IMPACT: EXPORTS, SECTORS, AND INVESTMENT
Under the agreement, EU exports to Australia are projected to reach €17.7 billion annually within ten years, marking a one-third increase. The sectors expected to benefit most include dairy, with projected growth of up to 48%. At the same time, EU investment flows into Australia could expand by more than 87%, underlining the scale of the economic opportunity.
The free trade agreement will eliminate over 99% of tariffs on EU goods entering Australia, translating into an estimated €1 billion in annual tax savings for companies of all sizes. It will also open Australia’s services market—particularly in financial services and telecommunications—while granting EU firms greater access to public procurement. In addition, the agreement introduces what officials describe as “ambitious” rules on data flows, notably banning data localization requirements, and strengthens supply chains for critical raw materials by reducing import tariffs and encouraging investment. A dedicated chapter is also included to support small and medium-sized enterprises (SMEs) in expanding their export capacity.
GEOGRAPHICAL INDICATIONS: PROTECTION WITH EXCEPTIONS
A central pillar of the agreement is the protection of EU Geographical Indications (GIs), with 165 agricultural and food products and 231 alcoholic beverages covered. The deal also updates the bilateral wine agreement by extending protection to all 1,650 EU wine geographical indications and adding 50 new ones from 12 member states.
THE ITALIAN NAMING ISSUE: “PROSECCO” AND BEYOND
A politically sensitive compromise concerns the continued use in Australia of certain iconic Italian product names, reflecting the country’s long history of Italian migration and local production traditions. Under the agreement, the geographical indication “Prosecco” will ultimately be protected, but Australian producers will be allowed to continue using the name for exports during a transition period of ten years after the deal enters into force. More broadly, some EU-protected geographical indications currently used in Australia “in good faith and continuously” will be phased out over relatively short transition periods. These include products such as Pecorino Romano at the retail level, Tsipouro, Munster, Vinagre de Jerez, and Ouzo, all of which will eventually receive full protection under the agreement.