On 24 March 2026, Australia and the European Union concluded negotiations on a landmark free trade agreement.
The Australia-European Union Free Trade Agreement (A-EU FTA) is the most comprehensive, progressive and commercially meaningful trade agreement Australia has ever concluded.
It will further strengthen Australia’s economic and strategic partnership with the EU, already one of Australia’s most important trade and investment partners.
The EU is Australia’s 4th largest source of foreign direct investment (FDI). In 2024, the EU’s FDI in Australia increased by 6.8%.
Supporting the energy transition
The A-EU FTA will provide greater predictability for EU companies seeking to invest in sectors such as mining, manufacturing, critical minerals and renewable energy.
Once fully implemented, 98% of the current value of Australia’s goods exports will enter the EU duty-free.
Tariffs will be eliminated on a range of goods, including on energy and resource products that are essential inputs for the EU’s clean energy and digital transition. These include:
- critical minerals, which can face tariffs of up to 5.5%
- lithium hydroxide, which can face a tariff of up to 5.3%
- hydrogen and its carriers, which can face tariffs of up to 5.5%.
The FTA is also an important step in Australia’s partnership with the EU on critical minerals, building on the Australia-EU Strategic Partnership on Sustainable Critical Minerals signed in 2024. The removal of tariffs on critical minerals will make Australian exports more competitive in the EU.
Supporting investment
Australia will raise its foreign investment screening thresholds for private EU investors in line with thresholds for other FTA partners. There is also no investor-state dispute mechanism in the A-EU FTA, reflecting the confidence the two jurisdictions share in each other’s legal systems. Australia has, however, retained the right to screen EU investments on national interest and national security grounds.
The A-EU FTA will also help reduce administrative requirements for professionals. It will create a streamlined process to recognise professional qualifications in both the EU and Australia.
Australian service suppliers working in areas related to climate action, including in engineering and construction, will benefit from greater access to the EU market, and vice versa.
More information on how the A-EU FTA benefits investors can be found here.
New opportunities to collaborate
EU researchers and technical specialists will be able to collaborate on research, and exchange skills and expertise with Australian research institutions and innovative industries to their mutual benefit.
The A-EU FTA will facilitate research and innovation collaboration through a new Innovation Mobility Pathway. Under the pathway, eligible EU researchers can undertake research placements and internships in Australia for up to three years.
Eligible EU researchers and technical specialists will also be able to come to Australia to exchange skills and undertake workplace-based training for up to one year.
Next steps
Europeans and Australians will be able to benefit from the agreement once it enters into force. This could take up to two years.
More information on the next steps to bring the agreement into force can be found here: A-EU FTA Next Steps.
How Austrade can help
The Australian Trade and Investment Commission (Austrade) supports foreign investors to establish and expand operations in Australia. Our experts in Australia and around the world can help you through every stage of your investment journey.
We offer the latest industry insights, connections with key stakeholders and decision-makers, and virtual or physical site visits to Australia. Thousands of foreign businesses have worked with us to tap into the Australian market.
For information on investment opportunities in Australia, contact an Austrade investment specialist.
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