Australia and the EU have announced a major tie-up as they have signed a sweeping free trade agreement that will eliminate tariffs on nearly all trade between them as global economies seek to hedge against chaotic US tariff policies.
The announcement came after crude oil prices also rose again as traders remained skeptical of signals that Washington is trying to de-escalate its war with Iran.
Key takeaways from the Autralia-EU major tie-up:
The two sides also agreed to step up cooperation on defence as well as on critical raw materials.
Another compromise will see Australian winemakers allowed to use the term "prosecco" domestically, but they must stop using it for exports after 10 years.
Australia will also be allowed to keep using some geographical names, such as feta and gruyere, in cases where producers have used the name for at least five years.
The quota of Australian beef allowed into the bloc will increase more than 10 times the current level over the next decade.
Moreover, the European carmakers will benefit from Australia raising the threshold for a luxury car tax on electric vehicles—three-quarters will now be exempt.
The European Union chief Ursula von der Leyen's visit to Australia comes as the 27-nation bloc and the import-reliant nation navigate renewed energy vulnerability sparked by the war in the Middle East.
A fair deal:
Under the accord, the EU said it expected exports to Australia to grow by a third over a decade.
EU firms exported 37 billion euros (US$42.9 billion) of goods to Australia last year and 31 billion euros of services in 2024.
The new deal could add AU$7.8 billion (US$5.4 billion) to its gross domestic product by 2030.
EU chief told Australian lawmakers that the agreement on trade was a "fair deal and one that delivers for your businesses and one that delivers for our businesses."
