As developed economies with a shared belief in a free open market, Australia and the EU are natural partners – with two-way trade in goods and services amounting to over €74bn annually.
As a bloc, the European Union is Australia’s second largest trade partner and third largest export destination, whilst Australia is the EU’s 18th largest partner. The strength of this bilateral relationship is also reflected in strong social ties – with over 1.5 million tourists heading in both directions per year, and 45,000 EU students studying in Australia.
However, the EU currently imposes high tariffs on most Australian industrial (minerals, metals, wood and chemicals) and agricultural products (beef, sheep, meat, sugar, cheese, rice). A free trade agreement (FTA between Europe and Australia would greatly reduce the cost of trade between the two partners, building a transparent system that offers greater predictability for investors and greater choice for consumers.
Enhanced trade would be a win-win, benefiting both European and Australian businesses. For example, in agri-foods, the current balance of trade is heavily in the EU’s favour – with over €1.3bn more European agri-foods being exported to Australia than coming the other way. Enhancing these opportunities through an FTA would increase potential for EU producers.
- To get a better overview of what the market might look like under an FTA between Australia and Europe, check out this Australian Government fact sheet: https://dfat.gov.au/trade/agreements/negotiations/aeufta/Pages/australia-european-union-fta-fact-sheet.aspx
Article Date: 6th May 2019