What the Australia-EU Free Trade Agreement means for the local economy

Australia and the European Union have signed off on a long-coming free trade agreement (A-EU FTA) which is set to eliminate tariffs, reduce export constraints and improve access to overseas labour. The pact, which followed eight years of negotiations, means 98% of the value of Australia’s exports will no longer be subject to tariffs, and expands quota volumes for various agricultural products. The deal comes as increasing global geopolitical instability has heightened the need for economic security and reliable trade partnerships.

For Australia, the key benefits of the agreement include the EU’s removal of tariffs on wine, seafood, beef and dairy, as well as Australia’s removal of tariffs on EU products which will reduce consumer prices on everything from European cars to food items. These changes are expected to grow the EU’s exports to Australia by 33% in the next decade, enhancing economic ties with the region, while the agreement could increase Australia’s real GDP by $7.8 billion by 2030. However, reception to the agreement has been mixed, with the National Farmers’ Federation describing the treaty as the “worst ever free trade agreement” due to concerns that it fails to provide sufficient access to the much larger EU economy.

The agreement also opens streamlined pathways for recognising Australian professional qualifications overseas,allowing skilled Aussie professionals to deliver contracted services for up to a year in the EU. The pact also provides greater predictability and certainty for EU investors looking to deploy investment capital into Australia, increasing the attractiveness of Australian ventures which could support further job creation. Despite some criticism, the A-EU FTA is set to expand Australia’s export market, reduce prices on European goods, and attract greater levels of foreign capital, which all serve domestic economic interests of economic growth and jobs creation.

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