EU and Australia strengthen relations with Security and Defence Partnership and Trade Agreement

This article is brought to you in association with the European Commission.

The EU and Australia have today announced the adoption of a groundbreaking Security and Defence Partnership. They have also concluded negotiations for an ambitious and balanced free trade agreement (FTA) and agreed to launch formal negotiations for the association of Australia to Horizon Europe, the world’s largest funding programme for research and innovation. With these steps, the EU and Australia are delivering mutually beneficial outcomes and further reinforcing their already close relations in a time of geopolitical uncertainty.

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

President von der Leyen said:  “The EU and Australia may be geographically far apart but we couldn’t be closer in terms of how we see the world. With these dynamic new partnerships on security and defence, as well as trade, we are moving even closer together. These agreements put in place lasting, trust-based structures to support peace and security through strength; driving prosperity through rules-based trade, and working together to uphold global institutions. We are committed to building a cleaner, more digital future for our citizens, workers and businesses. And we are sending a strong signal to the rest of the world that friendship and cooperation is what matters most in times of turbulence.”

Security and Defence Partnership

The EU and Australia are already long-standing allies and partners, whose global outlook is aligned in terms of defending multilateralism and the rules-based international order.

As the interconnection between security in Europe and the strategically important Indo-Pacific region becomes clearer, the value of deeper partnership is abundantly clear for both sides.

Building on the strong existing interaction at leaders’ and ministerial level, backed up by a solid network of expert level cooperation, the SDP will put in place a robust institutional framework, helping to ensure maximum efficiency in addressing current geopolitical challenges:

• Security and Defence Dialogues will enable closer coordination on strategic priorities, translating shared values and interests into practical cooperation;
• Strengthening cooperation on crisis management and Common Security and Defence Policy missions and operations, including exercises, training and education;
• Enhancing cooperation on maritime security, cyber security, countering hybrid threats and foreign information manipulation and interference, reflecting the evolving nature of contemporary security challenges;
• Facilitating close coordination on emerging and disruptive technologies, including artificial intelligence, as well as on space security, non-proliferation and disarmament;
• Reinforcing exchanges on situational awareness, across different regions;
• Supporting capacity building for partners, including in the Indo-Pacific, and strengthening coordination in multilateral and regional fora; and
• Allowing the EU and Australia to deepen cooperation over time in response to 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 the market to one of the world’s fastest-growing developed economies and thereby bringing significant economic opportunities to European companies, consumers and farmers. 

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

With this deal the EU also reinforces its strategic interests in the area of critical raw materials, making EU supply chains stronger and more resilient against geopolitical shocks. The FTA also includes strong sustainability commitments, which will contribute to greener and fairer trade, and ensures that imports into the EU are more aligned with the EU’s own production standards on climate, environmental and animal welfare.

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

Opening business opportunities for European companies  

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

• Removing over 99% of tariffs on EU goods exports to Australia, thus cutting some €1 billion a year in duties for companies of all sizes;
• Opening of the Australian services market in key sectors, including financial services and telecommunications;
• Providing greater access for EU companies to Australian government procurement contracts;
• Setting ambitious rules on data flows prohibiting data localisation requirements; and
• Securing supply chains of critical raw materials (CRMs) by lowering tariffs on imports and opening investment opportunities.

In addition, to ensure that small businesses also benefit from the agreement, it contains a dedicated 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, while 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 for agri-food products with Australia, worth €2.3 billion in 2024. The agreement will   eliminate tariffs on major EU exports such as cheeses, meat preparations, wine and sparkling wine, some fruits and vegetables including preparations, chocolate, and sugar confectionary.

The agreement takes into account the interests of EU agricultural producers. For sensitive agricultural sectors such as beef, sheep & goat meat, sugar, some dairy products and rice, the agreement will allow zero or lower tariff imports from Australia only in limited amounts, through carefully calibrated Tariff Rate Quotas.  

In addition, the agreement includes a bilateral safeguard mechanism allowing the EU to take measures to protect sensitive European products and their producers in the unlikely event of a surge in imports from Australia causing injury to the EU market.   As an additional layer of protection for farmers, the bilateral safeguard mechanism will be operationalised in a self-standing EU regulation that will see swift and effective protections kick into gear, in the unlikely event of an unforeseen and harmful surge in imports or an undue decrease in prices for EU producers.

Moreover, the Agreement will protect 165 agricultural and food Geographical Indications (‘GIs’) and 231 spirit drink GIs including some of the most renowned ones such as Comté, Irish Whiskey, Queso Manchego, Salam de Sibiu, Istarski pršut ham, Lübecker Marzipan and Masticha Chiou.  

The EU and Australia have also agreed on a modernised bilateral wine agreement, updating the full list of EU wine GIs and traditional terms protected in Australia. Building on the previous successful agreement, 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 critical raw materials access  

Australia is a major producer of raw materials, including aluminium, lithium and manganese, which are vital for the EU’s overall economic security and competitiveness. The demand for critical raw materials (CRMs) is projected to increase substantially, and the EU remains heavily reliant on imports.  

The deal facilitates EU access to Australian CRMs, with dedicated provisions making the market more predictable and reliable for EU businesses. In addition, special environmental and safety provisions will ensure that these CRMs are extracted sustainably.  

Trade in CRMs is currently easily disrupted by sudden economic or geopolitical shocks, therefore trade agreements with reliable partners are essential for stabilising the EU’s supply.  

Ambitious sustainability commitments  

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

All TSD commitments in the deal will be enforceable via the agreement’s general dispute settlement mechanism. The deal includes binding commitments on core labour principles and the Paris Climate Agreement, as well as a dedicated sustainable food systems chapter.  

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

Next steps on the FTA

On the EU side, the negotiated draft texts will be published shortly. The texts will go through the necessary internal procedures before the Commission will put forward its proposal to the Council for the signature and conclusion of the agreement. Once adopted by the Council, the EU and Australia can sign the agreement. Following the signature, the agreement requires the European Parliament’s consent, and the Council’s decision on conclusion for it to enter into force. Once Australia also ratifies the Agreement, it can enter into force.  

Background

Negotiations for an FTA with Australia started in July 2018. The 15th and last formal negotiating round was held in April 2023, followed by intersessional discussions at technical and political level, leading up to the conclusion of the negotiations on 24 March 2026. The deal 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 India in January 2026.

For more information

EU-Australia FTA page

Questions and answers

Factsheet – Main benefits

Factsheet – Trade and sustainable development

Factsheet – Critical raw materials

Factsheet – Agri-food

Memo

EU-Australia trade relations