On 22 May 2018, the Council of the European Union authorised the opening of negotiations for a Free Trade Agreement (FTA) between the EU and Australia.
So far the EU and Australia have been conducting their trade and economic relations under the 2008 EU-Australian Partnership Framework. This aims to facilitate trade in industrial products between the EU and Australia by reducing technical barriers and improve trade in services and investment.
Australia already has FTAs with four of its top five trading partners – China, Japan, the United States and South Korea.
The Minerals Council of Australia said an FTA will present significant opportunities to boost trade, investment and economic engagement with Europe.
“An FTA with the EU – which comprises 22.5% of world GDP – would be a significant addition to Australia’s network of bilateral and regional FTAs which support exports and jobs in Australia.”
While the EU is not as significant a market for Australian mining exports as the economies of East Asia, coal, gold and lead are amongst Australia’s largest goods exports to the EU, worth around $8.8 billion in 2017.
The EU has relatively low tariffs on most resources commodities. However, there are a number of minerals and metals commodities where it imposes tariffs of up to 9%, including aluminium, lead, zinc, titanium and antimony.
An Australia-EU FTA provides an opportunity to remove these tariffs on Australian resources exports.
Australian mining could also benefit from reductions in Australian tariffs on European mining-related equipment and manufactures such as machinery, heavy vehicles and chemicals.
The FTA negotiations will also focus on services, investment, and business regulation – areas where there are opportunities to enhance the wider economic relationship between Australia and the EU.
- Australia ranked as the 18th-largest trade in goods partner of the EU, while the EU represented Australia’s second-largest trading partner after China in 2017.
- Total trade in goods account for 47,7 billion € in 2017, and total trade in services add another 27,1 billion € (2016).