Australia, European Union agree sweeping new trade pact 8 years in the works

The European Union (EU) and Australia struck a long-awaited free-trade deal on Tuesday, while also agreeing to boost defence cooperation and access to crucial rare-earth minerals in the face of global uncertainty over trade.

EU chief Ursula von der Leyen’s visit to Australia comes as the 27-nation bloc and the import-reliant nation navigate renewed energy vulnerability sparked by the US-Israel war on Iran.

The accord is the latest agreed by Brussels in a push to diversify trade as Europe faces challenges from the United States and China.

Key sticking points on Australian use of European geographical names as well as how much beef can be exported to the continent were overcome to reach the deal after eight years of negotiations.

Another compromise will see Australian winemakers allowed to use the term “prosecco” domestically, but they must stop using it for exports after 10 years.

Australia will also be allowed to keep using some geographical names, such as feta and gruyere, in cases where producers have used the name for at least five years.

And European carmakers will benefit from Australia raising the threshold for a luxury car tax on electric vehicles — three-quarters will now be exempt.

The two sides also agreed to step up defence cooperation as well as critical raw materials.

Addressing the Australian parliament on Tuesday, von der Leyen described a world that was “brutal, harsh and unforgiving”.

In that context, she said the EU and Australia were bound by common values and must work together to mitigate over-reliance on countries such as China for rare-earth minerals.

“We cannot be over dependent on any supplier for such crucial ingredients, and that is precisely why we need each other,” she said

“Our security is your security, and with our new security and defence........

© Dawn Business