EU and Australia Forge Prosperous Trade Partnership
The EU and Australia have concluded a Partnership on Security and Defence and finalized negotiations on a Free Trade Agreement. Formal talks have also been launched on Australia’s association with Horizon Europe, the world’s largest research and innovation funding programme.
The Confederation of Industry of the Czech Republic welcomes the conclusion of trade negotiations, as we have long advocated for the expansion of the EU’s network of free trade agreements as an effective tool to support and diversify the Czech export-oriented economy.
Benefits for Czech exports to Australia
The volume of Czech exports to Australia reached nearly CZK 13 billion last year, making Australia the 40th largest export destination for Czech goods (according to national trade statistics).
The agreement will remove more than 99% of tariffs on EU exports, enhancing the competitiveness of Czech exporters, particularly in key sectors. The greatest benefits are expected in the automotive industry—where passenger cars account for more than one-third of Czech exports—as well as in engineering, ICT, and telecommunications technologies. These sectors represent major export categories and have further growth potential thanks to the removal of both tariff and non-tariff barriers.
Another significant benefit of the agreement is the opening of the Australian market for services and public procurement, which may enable Czech companies to participate more easily in local infrastructure and technology projects. The modern digital trade rules, including limits on data localization requirements, create favourable conditions especially for innovative and technology-driven businesses.
New opportunities in security and defence
The partnership opens new opportunities for companies in the defence industry and security technologies, particularly in cybersecurity, artificial intelligence, and space applications. Enhanced cooperation in research, development, joint exercises, and projects may facilitate the involvement of Czech firms in supply chains and initiatives across the Indo-Pacific region. At the same time, there are increasing opportunities for participation in international programmes, training, and innovation initiatives that can further support exports and technological development.
Securing access to critical raw materials
Australia is a major producer of raw materials, including aluminium, lithium, and manganese, which are essential for the EU’s overall economic security and competitiveness. Global demand for critical raw materials is expected to grow significantly, while the EU remains largely dependent on imports.
Trade in critical raw materials is currently highly vulnerable to sudden economic or geopolitical shocks; therefore, trade agreements with reliable partners are crucial for stabilizing supply to the EU.
Position of the Confederation and BusinessEurope
In the field of international relations, the Confederation has long focused on promoting open, rules-based international trade and strengthening the competitiveness of Czech industry. Free trade agreements remove barriers and bring greater stability and predictability—especially relevant at a time when we are witnessing a deterioration in global trade conditions and growing protectionism among our trading partners.
BusinessEurope welcomes the conclusion of trade negotiations between the EU and Australia. BusinessEurope President Fredrik Persson said:
“This agreement is a win for both sides, geopolitically and economically. Crucially, it reaffirms the EU and Australia’s shared commitment to open, rules based trade and to working together to diversify their economies, reduce strategic dependencies, and build secure, resilient supply chains.
Australia is also a major player in the strategic and dynamic Indo-Pacific region, which accounts for much of the projected global economic growth in the coming years.
Along with opening up new market opportunities for European exports of services and goods through duty elimination in areas ranging from chemicals to agrifood products, it demonstrates the potential for Australia to be an important partner for the EU in securing access to critical raw materials and energy.
With EU Foreign Direct Investment in Australia already being close to €123 billion, we expect that the agreement will open the door to further investment across a diverse range of sectors, including security and defence.”
Next steps
On the EU side, the negotiated draft texts of the agreement will be published shortly. Once the internal procedures are completed, the European Commission will submit a proposal to the Council of the EU for the signing and conclusion of the agreement. After approval by the Council, the EU–Australia agreement can be signed.
Following the signature, the agreement’s entry into force will require the consent of the European Parliament and a Council decision on its conclusion. Once ratified by Australia as well, the agreement will be able to enter into force.