Australia and the European Union (EU) are on the cusp of finally reaching a free trade agreement after years of sometimes fraught negotiations, with both sides increasingly optimistic that Prime Minister Anthony Albanese and EU President Ursula von de Leyen will be able to sign a deal within weeks.
Talks have long been stalled after collapsing spectacularly in 2023, and Trade Minister Don Farrell has been adamant Australia will not sign a deal unless the EU agrees to tear down tariff barriers to larger quantities of agricultural exports such as beef and lamb.
Both sides have also been negotiating over working rights and labour mobility, Australia’s luxury car tax, and the use of geographical indicators that could stop Australian producers using labels such as “fetta” and “prosecco”.
Earlier this week Senator Farrell flew to Brussels for talks with EU Trade Commissioner Maroš Šefčovič and Agriculture Commissioner Christophe Hansen, as both sides try to break the deadlock and strike a blow for free trade in the face of global economic fragmentation and the Trump administration’s tariff assault.
Trade Minister Don Farrell (right) is hoping to increase trade with the EU, Australia’s third-largest trading partner. (Supplied: Minister for Trade and Tourism)
Sources from the EU and Australia said the deal was now close.
Mr Albanese and Ms von de Leyen now have to resolve one outstanding issue — believed to be connected to red meat exports — before the deal can officially be signed.
In a joint statement, Senator Farrell and the EU commissioners said the talks were “constructive and positive” and “allowed the two sides to converge positions on a range of issues”.
“Good progress was achieved in narrowing gaps on a small number of outstanding matters,” the statement said, adding they would take the offer to Mr Albanese and Ms von der Leyen respectively for sign off.
EU nations are collectively already Australia’s third-biggest trading partner, and the deal could help further open the 450 million-strong market to Australian producers, delivering a major win to the federal government and, potentially, a significant boost to GDP.
It would also help reinforce the strategic relationship with Australia and the EU — which are already close to finalising a separate security partnership — in the face of global turmoil.
Agriculture access a sticking point
But farmers’ groups in Australia have been fiercely critical of Europe’s generous agricultural subsidies, and have urged the federal government to reject any deal that does not provide “significantly increased access” for Australian agricultural exports.
The European Union and member states are also likely to face political pressure from European farmers, with one prominent lobbying group warning earlier this week that the pact should not “expose EU farmers to intensified competition in already fragile markets”.
Senator Farrell said he was confident both sides would “reach agreement that benefits both of our economies”.
“As I’ve said repeatedly, any agreement must be in Australia’s national interest and provide real benefit for Australian business, producers, exporters and workers,” he said.
Ms von der Leyen is widely expected to travel to Australia to sign the free trade deal and the security partnership, but it is not yet clear exactly when she will make the trip.