EU and Australia sign free trade pact and announce a new defense
partnership
[March 24, 2026] By
ROD McGUIRK
MELBOURNE, Australia (AP) — The European Union and Australia on Tuesday
agreed on the final text of a free trade agreement, some two years after
negotiations broke down over Australian demands for more red meat market
access and complaints about Australian products labeled with
traditionally European names such as prosecco.
The breakthrough comes as both the EU and Australia seek to diversify
their trading networks and reduce their economic reliance on China and
exposure to uncertain U.S. tariffs.
European Commission President Ursula von der Leyen and Australian Prime
Minister Anthony Albanese signed the agreement at the Australian
Parliament House after protracted negotiations that began in 2018. The
leaders said the pact demonstrated that both sides benefitted from
rules-based trade.
“Today we are telling an important story to a world that is deeply
changing. A world where great powers are using tariffs as a leverage and
supply chains as vulnerabilities to be exploited," von der Leyen told
reporters.
"In our story, open rules based trade delivers positive some outcomes.
Trust matters more than transactions,” she added.
Albanese said the context in which the agreement was reached was an
important factor in allowing negotiations that collapsed in October 2023
to restart.
“This is both the European Union and Australia asserting that we believe
in free and fair trade, that we understand that trade advances the
prosperity of both trading entities who are involved, that it is in our
interest to get this done,” Albanese said.
The leaders also announced a new defense partnership that will bring
closer military cooperation and the start of negotiations toward
Australia becoming an associate of the research and innovation funding
program Horizon Europe.
Albanese said the defense partnership would provide a framework for the
EU and Australia to cooperate on global challenges, marking as areas of
collaboration defense industries, maritime security, cyber security,
countering terrorism and combating hybrid threats such as
disinformation.
“It shows our shared commitment to global peace and security, including
reaffirming our steadfast support for Ukraine in the face of Russia’s
illegal full-scale invasion,” Albanese said.
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European Commission President Ursula von der Leyen, left, and
Australian Prime Minister Anthony Albanese shake hands after signing
a joint statement during a ceremony at Parliament House in Canberra,
Tuesday, March 24, 2026. (Lukas Coch/AAP Image via AP)
 Albanese said the pact also removed
tariffs on key Australian exports including wine, seafood and
horticulture.
The EU will open two tariff rate quotas of a total of 30,600 metric
tons (33,731 U.S. tons) for Australian red meat, with 55% of that
duty free.
Under the trade deal, Australian producers of prosecco,
traditionally a sparkling wine from northern Italy, will be banned
from using the name on exports 10 years after the pact takes effect.
A start date for the pact has not been announced.
The pact will also help the EU secure supplies of critical raw
materials including lithium and tungsten.
Hazel Moir, an economist from the Australian National University’s
Center for European Studies, said that both the Europeans and
Australians were keen to reach a deal in response to U.S. President
Donald Trump's push to impose global tariffs.
“What’s changed is all of Trump’s behavior on tariffs. So everyone
got nervous and they wanted to do other things,” Moir said.
Moir said it was too soon predict the impact on bilateral trade, as
the agreement's full text has not yet been released.
An EU free trade deal with four South American countries will begin
on May 1 after more than a quarter-century of negotiations and new
global economic uncertainty.
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