Australia EU trade relations 2025 reflect a dynamic and steadily evolving trade relationship that plays a significant role in both regions’ economic landscapes. Despite the absence of a formal Free Trade Agreement (FTA) so far, bilateral trade has grown robustly, underpinned by strategic frameworks and cooperation mechanisms that facilitate market access and investment.
Trade Overview and Economic Significance
In 2024, Australia ranked as the EU’s 20th largest goods trading partner, accounting for approximately 1% of the EU’s total trade. Meanwhile, the EU remains Australia’s third-largest trading partner after China and Japan, representing 8.6% of Australia’s total trade.
The total trade in goods between the EU and Australia reached an estimated €49.4 billion in 2024, with the EU recording a surplus of around €27.9 billion. The EU’s main exports to Australia include machinery, transport equipment, and chemicals, while Australian exports to the EU primarily consist of mineral products and vegetable products. Trade in services further strengthened the relationship, with an additional €38.1 billion traded in 2023, where the EU maintained a surplus of €17.9 billion.
Foreign Direct Investment (FDI) flows reflect the mutual confidence in this partnership, with EU investments in Australia totaling €122.8 billion and Australian investments in the EU amounting to €25.2 billion in 2023.
Cooperation Frameworks
Although a formal Free Trade Agreement between Australia and the EU is still under negotiation—authorized by the Council of the European Union in May 2018 and with fifteen negotiation rounds completed—the two economies engage under the 2008 EU-Australian Partnership Framework. This framework focuses on reducing technical barriers to trade, facilitating industrial product exchanges, and enhancing trade in services and investment.
Since 2022, the EU and Australia have strengthened ties through a political Framework Agreement featuring economic and trade-cooperation arrangements. Annual senior official-level dialogues provide a platform for discussing trade issues, while a Mutual Recognition Agreement simplifies conformity assessments, lowering costs and accelerating market access for exporters and importers.
Moreover, in May 2024, a Strategic Partnership was concluded focusing on non-energy and non-agricultural raw materials, especially critical and strategic raw materials vital to clean energy and digital transitions. This partnership is guided by a Memorandum of Understanding (MoU) and a detailed roadmap endorsed in late 2024.
The Importance of Strategic Market Entry
For Australian companies considering expansion into Europe, understanding this trade landscape is critical. Spain, in particular, stands out as a gateway due to its competitive operational costs—approximately 30% lower than the EU average—and strong logistics infrastructure.
Gedeth leverages its deep expertise and local presence to support Australian businesses in navigating the complexities of European markets. Our CEO is an active member of the Australia New Zealand Spain Business Association (ANZSBA), reinforcing Gedeth’s commitment to facilitating meaningful connections and successful market entries for Australian companies across Europe.
To explore how your company can benefit from the growing Australia–EU relationship, reach out to our team:
? contact@gedeth.com
? www.gedeth.com
