The EU will obtain specific supplies of key raw materials such as aluminum, lithium, and manganese from Australia

This agreement, which has been negotiated for nearly eight years, will eliminate tariffs on the vast majority of goods from both sides and provide greater convenience for the EU to access Australia's key mineral resources.

According to this highly anticipated trade agreement, the EU will eliminate approximately 98% of import tariffs on Australian goods, including wine, dairy products, wheat, barley, and seafood; In exchange, Australia will lift tariffs on over 99% of EU goods, with a focus on dairy products, automobiles, and chemical products.

European Commission President von der Leyen said in the statement: "In turbulent times, we have sent a strong signal to the world - friendship and cooperation are of vital importance."

She added, "Although the EU and Australia are far apart, their worldviews are highly consistent. With the establishment of new dynamic cooperative relationships in areas such as security, defense, and trade, the two sides are further narrowing the distance

Von der Leyen met with Australian Prime Minister Albanese earlier this week, ending the trade negotiations that started in 2018.

Albanese stated at a press conference on Tuesday that the agreement will promote the development of the Australian economy, and the EU's cancellation of almost all import tariffs on key Australian minerals will help stabilize the global supply chain.

It is reported that this bilateral negotiation reached a deadlock in 2023, with the main difference being that Australia hopes to expand its export quotas for lamb and beef to the EU, while the EU demands more access to key mineral resources and lower tariffs. With the Trump administration raising foreign tariffs, both sides subsequently accelerated the negotiation process.

At present, the EU mainly imports mineral and agricultural products from Australia, while exporting machinery, transportation equipment, and chemical products to it.

Almost all Australian manufacturing products and mineral resource exports entering the EU market will achieve zero tariffs. As the second largest source of foreign investment in Australia, the EU's investment scale is expected to grow by over 87%.

The agreement also includes a bilateral safeguard mechanism: if the surge in Australian imports has an impact on the EU market, the EU can take measures to protect local sensitive industries.

Key mineral supply

The EU will obtain specific supplies of key raw materials such as aluminum, lithium, and manganese from Australia, which are crucial for the EU's economic security.

The EU points out that trade in key raw materials is "highly susceptible to sudden economic or geopolitical shocks", therefore establishing cooperative relationships with reliable partners is crucial to ensuring supply security.

On the security front, the EU and Australia have also pledged to strengthen cooperation in disruptive technologies such as crisis management, maritime security, and artificial intelligence (AI).

Diversification of trade relations

In the past year, the EU has accelerated the process of reaching trade agreements with multiple parties to diversify economic, trade, and security cooperation risks. As the United States is seen as increasingly unreliable, this trend is becoming more apparent.

US President Trump has imposed high tariffs, including on allies, impacting the rule-based trading system; Simultaneously launching surprise attacks in Venezuela and Iran without prior notification to allies, further exacerbating tensions with traditional partners.

In his speech on the situation in the Middle East at the Australian Parliament on Tuesday, von der Leyen said: "No country can be immune from the geopolitical and economic impact of the Iran war."

The current regional conflict has reignited market concerns about tight energy supply and rising inflation in Europe. Europe heavily relies on imported crude oil and natural gas.

The EU reached a trade agreement with India earlier this year, which will eliminate or reduce tariffs on over 90% of goods; Last year, trade negotiations with Indonesia were completed.

In addition, the European Commission announced on Monday that the trade agreement with the South American Common Market is expected to come into temporary effect in May.