EU-Australia FTA: Tarriff removal and export growth projections

The European Union and Australia have concluded negotiations on a comprehensive free trade agreement (FTA), marking a significant step for international business and trade.

The agreement, finalised during a meeting between European Commission president Ursula von der Leyen and prime minister of Australia Anthony Albanese, will remove over 99 percent of tariffs on EU exports. This is expected to save businesses around one billion euros annually and increase EU exports by up to 33 percent over the next decade.

For fashion and textile companies, the deal improves access to the Australian market by lowering costs and simplifying trade conditions. It also opens opportunities in services such as retail, e-commerce, and logistics, while enabling greater participation in Australian public procurement.

The agreement introduces modern rules on data flows, preventing data localisation requirements, integral to digital businesses operating across borders. It also includes provisions to support small and medium-sized enterprises, helping them scale exports more easily.

Sustainability is a key component. The FTA includes binding commitments on labour rights, environmental standards, and climate targets aligned with the Paris Agreement. Trade in sustainable goods, including eco-friendly materials and energy-efficient products, will also be facilitated.

In addition, the agreement strengthens supply chain reliability by improving access to critical raw materials essential for production and innovation.

In a statement, von der Leyen said the deal aims to “drive prosperity through rules-based trade,” reinforcing long-term business confidence between the two markets. “We are committed to building a cleaner, more digital future for our citizens, workers and businesses. And we are sending a strong signal to the rest of the world that friendship and cooperation is what matters most in times of turbulence,” von der Leyen added.