After eight long years of negotiations, the European Union and Australia in late March 2026 agreed to a major free trade deal, deepening economic and security ties as both sides seek to reduce exposure to geopolitical shocks and shifting global trade dynamics, the media reported.

The deal will eliminate most tariffs on goods traded between the two sides. The EU will remove around 98 percent of duties on Australian exports, including wine, dairy, wheat, barley and seafood. In turn, Australia will scrap more than 99 percent of tariffs on EU goods such as dairy, motor vehicles and chemicals.

In a nutshell, the A-EU FTA is a ‘once in a generation’ deal designed to boost the economies of both parties by opening a market that has been effectively closed for decades to many Australian and European agricultural products.

Beyond its traditional trade benefits, the agreement is increasingly viewed as a strategic instrument designed to strengthen supply-chain resilience and economic diversification, particularly in areas such as critical minerals, clean energy and other sectors considered vital to long-term economic security.

Prior to the signing of the agreement – which is expected to take place in late 2026 or early 2027 – Australia and the EU will complete legal checks and undertake the domestic processes required for signature.

After the agreement is signed, the Australian and European parliaments will seek to ratify it. These ratification processes are rigorous, meaning it could take some time before the A-EU FTA enters into force and key outcomes such as tariff elimination take effect.

A potential barrier is pressure from livestock producers in France on the European Parliament to block the agreement due to the perceived generosity of beef and lamb quotas. At the same time, the Australian Farmers’ Federation has criticised the Australian government on the grounds that the agreement does not secure a sufficiently significant increase in access to the European market.

Ultimately, despite opposition from agricultural lobby groups in both Europe and Australia that may seek to obstruct the deal’s adoption, the A-EU FTA sends a clear signal of a mutual commitment to open, transparent and rules-based trade.

EU-Australia trade deal in a nutshell
The EU and Australia concluded negotiations on a free trade agreement in March 2026. The agreement will

• remove over 99% of tariffs on EU exports to Australia
• improve access to critical raw materials
• strengthen strategic ties with the Indo-Pacific

EU’s cooperation with Australia is wide-ranging and covers security and defence, research and innovation, education, digital, climate, and environment. The EU and Australia also signed a Security and Defence Partnership.

Here are some facts about the Free Trade Agreement as affecting Croatia:

A deal for economic security, resilience and diversification

• New opportunities for companies, consumers and farmers in one of the world’s fastest-growing developed economies.
• Increased resilience against economic shocks and cementing ties with a like-minded ally at a time of intense geopolitical stress.
• Stronger supply chains, especially for critical raw materials.
• Deeper relations with the Indo-Pacific and a stronger European position in the world.

Key facts about trade with Australia

• Australia has a GDP of €1.7 trillion, making it the 14th largest economy in the world.
• Croatian exports: €351 million (goods: €34 million, 2025 data; services: €317 million, 2024 data).
• Total investment between Croatia and Australia: €115 million (2024).
• Croatian jobs supported by Croatian and EU exports to Australia: 1,892 (2023).

New opportunities for Croatian businesses big and small

• Small and medium-sized enterprises represent the vast majority of EU exporters, and they are expected to be among the key beneficiaries of this agreement.

• 143 companies from Croatia currently export to Australia – and this is poised to increase, thanks to this deal and to the new opportunities it creates.
• By eliminating tariffs on most goods, it will reduce export costs and improve the competitiveness of businesses.
• Simplified customs procedures and clearer rules of origin will help reduce administrative burdens, which often weigh more heavily on smaller companies.
• EU investment flows into Australia are also expected to increase by over 87%.
• The free trade agreement will facilitate the movement of highly skilled professionals in entering the other party to supply services and set up and run investments. This is particularly important as services represent a large share of EU exports.

Lower tariffs, more exports
• Croatia already exports €34 million per year in goods, including industrial products. Removing current Australian tariffs will enable EU businesses to save around €1 bn in customs duties per year.
• This will boost Croatian and EU exports, leading to a potential increase in EU goods exported to Australia of up to 33%.

More agri-food exports while supporting Croatian farmers
• Croatia already exports €16 million in agri-food products.
• The deal will create new export opportunities for agri-food products from Croatia by eliminating tariffs.
• It will protect the full list of 231 EU spirits, and 165 of the most renowned EU food GIs. In addition, under the modernised Wine Agreement, all the EU wine GIs (representing over 1,600 names) will be protected, including around 50 new ones.
• The FTA includes the protection of authentic and high-quality Croatian products:
Baranjski kulen
Dalmatinski pršut
Drniški pršut
Ekstra djevičansko maslinovo ulje Cres
Hrvatska loza
Hrvatska stara šljivovica
Hrvatska travarica
Hrvatski pelinkovac
Istarski pršut / Istrski pršut
Korčulansko maslinovo ulje
Krčki pršut
Krčko maslinovo ulje
Lički krumpir
Međimursko meso ‘z tiblice
Neretvanska mandarina
Ogulinski kiseli kupus / Ogulinsko kiselo zelje
Paška janjetina
Poljički soparnik / Poljički zeljanik / Poljički uljenjak
Slavonska šljivovica
Slavonski kulen / Slavonski kulin
Slavonski med
Šoltansko maslinovo ulje
Varaždinsko zelje
Zadarski maraschino
Zagorski puran

Protecting Croatian farmers in case of market disturbances
While it opens new opportunities, the agreement also protects Europe’s farmers:

• It limits the amount of sensitive agri-food products (such as beef, sheep meat, sugar and dairy) that Australia can export to the EU with lower tariffs, subjecting some of them to sustainability conditions.
• The EU can impose reinforced safeguard measures in case of a surge in imports, including for the most sensitive agri-food products imported from Australia.
• No agri-food products from Australia can enter the EU if they do not respect all the EU’s high health and safety standards.

More diverse sources of critical raw materials
• Critical raw materials (CRMs) are indispensable for a wide set of strategic sectors, including the net-zero and digital industries, with demand for CRMs in these sectors expected to increase exponentially.
• Europe relies heavily on imports of CRMs, and thus there is a pressing need for the EU to make deals with reliable suppliers of these materials.
• Australia is a major supplier of these CRMs, including aluminium, lithium and manganese.
• The deal will lower or eliminate entirely bilateral tariffs on both critical raw materials themselves and products made from them, thus securing the EU’s access to Australian CRMs.
• Under the Free Trade Agreement, Australia and the EU have agreed to enhance cooperation on critical raw materials, including through the possibility of jointly financing projects.

Ambitious sustainability commitments
• Binding commitments to the Paris Climate Agreement and core labour standards.
• Dedicated trade and gender equality provisions.
• Dedicated article on trade and fossil fuel subsidies reform.
• Liberalising trade on an indicative list of green goods and services at entry into force (e.g. related to renewable energy, including wind turbine towers, solar panel elements and energy-efficient products).
• All sustainability commitments will be enforceable via the agreement’s general dispute settlement mechanism.

Prepared by Ina Vukic