The Australia-European Union Free Trade Agreement (FTA) was recently finalised after eight years of negotiation. Under the FTA, Australian investors will benefit from enhanced opportunities for investment in the European Union (EU), 98% of the current value of Australia’s exports will enter the EU duty-free and Australian exporters will gain improved access to 450 million consumers in the EU.
The FTA is set to positively impact Australian and European industry sectors, including food, agribusiness, manufacturing, and resources and renewables, as well as foreign investment.
With negotiations concluded, the FTA will come into force once both Australia and the EU have completed their respective domestic ratification processes. The FTA is expected to be signed late 2026 or early 2027 and then, at least for Australia, our parliamentary processes may take a further 12 months before the FTA comes into force.
Foreign investment
The EU was Australia’s second largest source of foreign investment in 2024.
The FTA will provide greater predictability for EU investors seeking to invest in Australia including in sectors such as mining, manufacturing, critical minerals and renewable energy. This increased certainty for EU investors will improve the attractiveness of Australia as a target investment jurisdiction.
Australia will also raise its foreign investment screening thresholds for private EU investors.
On the other hand, the FTA will provide Australian investors non-discriminatory treatment in the EU market in sectors such as mining, manufacturing, energy, tourism and education.
Also, Australian companies will have better access to bid for lucrative European government contracts, including for rail and construction.
Food and agricultural products
The FTA will eliminate almost all EU tariffs on Australian food and agriculture products exported to the EU, including wine, nuts, fruit, vegetables, honey, olive oil, most dairy products, wheat, barley and seafood.
Although not a complete elimination of EU tariffs, the FTA will also deliver greater access to the EU for other Australian agricultural product exports, including Australian beef, sheep meat, sugar, rice, wheat gluten, skim milk powder and natural butter.
Further, Australian consumers, will enjoy cheaper European wine, spirits, biscuits, chocolates and pasta.
The FTA will have legal impacts on certain businesses.
Product labelling and geographical indications
In particular, the FTA will expand protection of geographical indicators (GIs) located in the EU. This may impact the branding and production strategies of Australian foods exported to the EU, particularly in relation to new goods.
Under the FTA, Australian producers will be required to meet specific rules to use any of the 396 protected EU GIs in product labels (noting, only several EU GIs are commercially significant to Australian producers).
The changes will require Australian food producers to consider their strategy and any new obligations in relation to protected EU GIs, including trade marks, product names, product labelling and overall branding for both pre-existing, as well as new food goods and products.
For a detailed analysis of the new GI regime, including continued-use terms, grandfathering arrangements and phase-out period for certain product names, see our article: Geographical indications: What the upcoming AU-EU Free Trade Agreement means for Australian producers | McCullough Robertson Lawyers
Resources, renewables and critical minerals
The FTA will provide Australian resources better access to the EU by eliminating EU tariffs on Australian energy and resources exports, including critical minerals, lithium hydroxide and hydrogen. Indications are that this will make Australian exports more competitive in the EU and increase demand. In addition to the foreign investment changes (see above), this provides a stronger platform for EU investment into Australia resources projects.
Contact us
If your organisation is exporting to the EU, investing in Australia (or vice versa), or re-assessing product naming and labelling in light of new GI regulations, now is the time to map the commercial opportunity and the compliance steps ahead of ratification.
McCullough Robertson is a leading, independent Australian law firm working with international and local clients and advisors across key impacted areas, including food and agribusiness, resources and energy, intellectual property and foreign investment. To discuss what the Australia-European Union Free Trade Agreement means for your business and the steps you can take now, please contact your usual McCullough Robertson partner or a member of our international team.