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In Brief
- The deal gives Australian exporters greater access to 450 million people in Europe and removes tariffs on European imports.
- Australian meat exporters said that the increased access the government had secured falls well short of expectations.
Australia and the European Union have inked a $10 billion free trade pact, yet meat exporters feel it misses the mark and have expressed significant disappointment.
This agreement aims to provide Australian exporters with enhanced access to a global market comprising over 450 million individuals, while also removing tariffs on European goods. The deal is anticipated to deliver a substantial economic boost worth billions to the Australian economy.
Prime Minister Anthony Albanese emphasized the significance of this partnership, especially in the context of an increasingly “unpredictable” international landscape.
Speaking in Canberra on Tuesday, he described the agreement as mutually beneficial, noting that it will abolish tariffs on a range of Australian exports, including wine, seafood, beef, and dairy products.
“This is advantageous for both Australian consumers and businesses,” he added, “as it offers a broader selection of goods and services at reduced prices, which includes crucial inputs for our manufacturing and primary industry sectors.”
Under the deal, Australia will remove a five per cent tariff on imports of European products, which hits car-makers like BMW and Mercedes along with producers of goods like fashion products, food and drink.
In exchange, the EU will allow expanded imports of Australian products, including beef and lamb.
A key dispute in negotiations was over the use of product names like ‘Prosecco’, which European winemakers wanted exclusive access to.
Under the deal, Australian producers will be allowed to continue calling the popular sparkling wine Prosecco for domestic sales, but the term will be phased out over 10 years for foreign exports.
Germany’s ambassador to Australia, Beate Grzeki, told SBS the deal would be advantageous to German carmakers, and said she supports it, referencing shifting global conditions.
“The commitment to cooperation among partners is especially important in times when disruptive forces are gaining ground and there is a growing sense that every country should act on its own and solely national interests matter,” she said.
“To show (…) we belong together, and together we are stronger. I believe that is a very important signal coming from this agreement.”
Later, in an address to parliament, Von der Leyen said Australia could no longer rely on distance to protect it from war and chaos.
“Countries that built economic models on the very premise of the stability and safety they provide are facing a new reality,” she said.
“The world we live in is brutal, harsh and unforgiving. It feels upside down. What we knew as certainties are in question. The comfort blanket of yesterday is ripped away.”
Meat exporters say they’re ‘profoundly let down’
Mere moments after the agreement was signed, meat exporters criticised the government, arguing that it had not signed a deal granting the access promised during years of negotiations.
Meat and Livestock Australia said in a statement that at least 50,000 tonnes of beef are required to be in line with EU competitors, instead of the 30,600 on offer.
They highlighted that the sheep meat and goat meat levels — 25,000 tonnes over seven years — paled in comparison to New Zealand’s 163,769 tonnes of access.
Andrew McDonald, chair of the Australia–EU Red Meat Market Access Taskforce, said the red meat sector was “profoundly let down by this outcome”.
“This is unquestionably a missed opportunity for Australia’s red meat producers, processors and exporters,” he said.
“It will limit our sector’s ability to diversify into a market of 27 countries with strong and ongoing demand for imported meat. It will also deprive most of the EU’s 450 million consumers of the chance to choose high‑quality, sustainable Australian red meat products.”
Cattle Australia chair Garry Edwards accused Trade Minister Don Farrell of “rolling over”.
“Europe is the highest value market for beef in the world. Australia has an enormous trade deficit with Europe — especially for agricultural products,” he said.
“This 10-year negotiation was an opportunity to try and address this imbalance.”
There is a clause in the pact for red meat producers – including sheep and beef – to review the arrangement after five years.
‘Tangible benefits’
European Commission President Ursula von der Leyen, who signed the agreement alongside Albanese in Canberra, highlighted the “tangible benefits” to European businesses of saving around one billion euros ($1.7 billion) in tariffs.
She said she expected the exports of goods to Australia to grow by 33 per cent in the next decade.
The deal would also allow 98 per cent of Australia’s exports to enter the European Union duty-free.
Von der Leyen said “collective resilience” is important, after being asked if the use of import taxes by United States President Donald Trump as geopolitical leverage had pushed the EU to compromise.
“Today, we are telling an important story to a world that is deeply changing, a world where great powers are using tariffs as leverage, and supply chains as vulnerabilities to be exploited,” she said.
“Trust matters more than transactions. It is a story of building strength at home and diversifying abroad through a reliable network of agreements that we respect and uphold.”
Albanese added that despite global pressure, the agreement sends a message “that it is possible to stick to the rules, to engage in a way that benefits both of our nations”.
The pair revealed that alongside the trade agreement, a defence and security partnership had been signed, which includes “defence industry cooperation, cyber and economic security, and counterterrorism”.
They also announced that Australia will join Horizon Europe in 2027, allowing Australian universities access to a pool of research and innovation funding.
“We’re joining forces to fight back against hybrid threats for our democracy, because we are both confronted with disinformation and wide attempts to erode public trust,” Von Der Leyen said.
– This story was produced in collaboration with SBS German and includes additional reporting by the Australian Associated Press.
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