SYDNEY, March 24 - The European Union and Australia have finalised a broad free trade agreement that slashes duties on many goods, establishes protections for select European product names, and expands access for services and investors. The deal covers agricultural goods, automobiles, critical minerals and hydrogen, services, and investment protections.
Agriculture and food products
Under the pact, a number of key EU export items will see tariffs removed immediately. Items listed for immediate elimination of duties include wine and sparkling wine, selected fruit and vegetables (including preparations and fruit juices), chocolate, sugar, confectionery and ice cream, and a range of processed agricultural products. Tariffs on EU cheeses are set to be phased out to zero over a three-year period.
Reciprocally, the EU will remove tariffs on most Australian agricultural exports. The list of Australian products receiving tariff elimination includes wine, nuts, fruit and vegetables, honey, olive oil, most dairy products, wheat, barley and seafood. In addition, Australian beef, sheep meat, sugar, rice, wheat gluten, skimmed milk powder and natural butter will receive either new tariff rate quota volumes or expansions of existing quota levels.
Protected European products and transitional arrangements
The agreement provides protection for a number of EU geographical indications - product names tied to specific regions. Some names, such as Pecorino Romano and Ouzo, will be fully protected following a relatively short phase-out period. For other names, including feta and gruyere, the treaty allows prior Australian users who have employed the term continuously for at least five years to retain the right to use those terms, provided the product origin is clearly labelled.
Producers who make and sell Prosecco within Australia will be allowed to continue domestic production under that name, but exports under the Prosecco name will be prohibited after a 10-year transition period.
Automobiles and electric vehicles
Australia will fully liberalise market access for EU passenger cars and other vehicles, with limited exceptions for a few tariff lines on trucks where duties will be removed gradually over a short period. The agreement also raises the luxury car tax threshold for EU electric vehicles to A$120,000, equivalent to $83,600. The raised threshold means that approximately 75% of electric vehicles imported from the EU will be exempt from the luxury car tax.
Critical minerals, hydrogen and investment
On critical minerals, the EU will eliminate tariffs on imports of Australian critical minerals and hydrogen. Australia, in turn, will open up investment opportunities in this sector to European investors. The investment provisions of the agreement grant EU investors the most favourable treatment accorded to any foreign investor in Australia and, in most cases, will result in EU investors receiving the same treatment as Australian investors.
Both EU and Australian investors will be free to establish companies and operate them in each other’s territories under the terms agreed.
Services
The deal aims to make it easier for EU firms to sell services in Australia. The sectors explicitly mentioned include professional and business services, maritime transport, and financial services. The agreement is intended to reduce and eliminate discrimination and to expand opportunities for both EU and Australian service providers and investors.
Practical note
The pact includes an exchange rate reference of $1 = 1.4255 Australian dollars as presented in the agreement documentation.
The agreement spans multiple sectors and creates phased transition measures for certain sensitive product names and categories while providing immediate tariff relief on many traded goods. It also establishes a framework for investor protections and market access in sectors identified as strategically important to both sides.