EU and Australia Finalize Landmark Free Trade Agreement
Canberra, Australia – March 24, 2026 – The European Union and Australia today concluded negotiations on a comprehensive free trade agreement, establishing a free trade area encompassing over 450 million consumers. This agreement is poised to significantly benefit businesses and farmers in both regions, particularly as Australia represents one of the world’s fastest-growing developed economies.
Significant Tariff Reductions
The agreement will eliminate tariffs on over 99% of EU exports to Australia. The European Commission anticipates that EU exports to Australia could increase by up to 33% over the next decade, potentially reaching €17.7 billion annually. These tariff reductions are projected to save EU exporters around one billion euros per year in duties. European Commission
Key Sectors to Benefit
Several key EU product groups are expected to experience substantial growth under the new agreement. These include:
- Dairy Products: Projected export growth of 48%.
- Vehicles: Increased access to the Australian market.
- Chemicals: Reduced tariffs will boost competitiveness.
Specifically, tariffs will be removed on key EU exports such as cheeses, meat products, wine and sparkling wine, select fruits and vegetables, chocolate, and confectionery. European Commission
Protecting Sensitive Agricultural Sectors
The agreement addresses the interests of EU agricultural producers by implementing carefully calibrated tariff rate quotas for sensitive sectors. These include beef, sheep and goat meat, sugar, certain dairy products, and rice. This approach will allow for limited imports from Australia at zero or reduced tariffs. European Commission
Expanding Service Market Access
Australia will open its market to EU financial and telecommunications services. The agreement also includes provisions to support small and medium-sized enterprises (SMEs) in both the EU and Australia, facilitating increased export opportunities. European Commission
Strategic Importance in the Indo-Pacific
This free trade agreement builds upon recent EU agreements with Indonesia and India, further diversifying the EU’s trade network within the strategically vital Indo-Pacific region. European Commission
Impact on Latvian Exports
Latvia’s exports to Australia have been steadily increasing in recent years, making Australia an increasingly important trading partner. In 2025, Latvian exports to Australia reached €55.24 million, an increase of €8 million compared to 2024. Key Latvian exports include wood and wood products, furniture, mechanisms, electrical appliances, pharmaceutical products, and meat. This agreement is expected to further stimulate Latvian exports to Australia.
Next Steps
The agreement will now undergo legal review and translation into all official EU languages. The European Commission will subsequently submit a proposal to the Council for the agreement’s signing, and conclusion. Negotiations for this FTA began in July 2018, with the 15th and final round of official negotiations taking place in April 2023. European Commission
Australian Prime Minister Anthony Albanese and European Commission President Ursula von der Leyen hailed the agreement as a landmark achievement for both regions.
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