Australia-EU Free Trade Agreement (FTA) confirmed: New access, new rules

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Authors: Leonie Ferretter, Sneha Kunnath

On 24 March 2026, Australia and the European Union (EU) concluded negotiations for the Australia‑EU Free Trade Agreement (A‑EU FTA), marking the end of an eight‑year negotiation process. The EU’s 27 member states together represent the world’s second‑largest economy and remains Australia’s largest trading partner without a formal free trade agreement. Once in force, the agreement will increase Australia’s FTA coverage from 78 to 88 per cent of total trade and 98 per cent of Australia’s goods exports to the EU will enter duty‑free.

However, the A-EU FTA is not yet operational - both parties must now complete domestic processes for signature and ratification, including parliamentary scrutiny and legislative amendments in Australia and multi‑stage approval across EU institutions. As a result, entry into force and access to its benefits may take up to two years.

Key measures

Tariff elimination

The A‑EU FTA will remove tariffs on a wide range of agricultural goods, processed foods, manufactured products and environmental goods, making European imports such as champagne, wine, spirits, biscuits, chocolates and pasta more affordable for Australian consumers. The agreement will also lower costs for farmers and businesses by removing customs duty on machinery, auto parts and equipment and strengthen cooperation on critical minerals, with the removal of EU tariffs improving the competitiveness of Australian exports in the EU market.

Agriculture

The agreement delivers significant new market access to the following goods:

  • Beef: 35,000 tonnes annual quota - an almost eight‑fold increase
  • Sheep meat: 30,851 tonnes annual quota - more than five times previous access
  • Horticulture: Tariff elimination for potatoes, onions, apples, pears and major tree nuts
  • Dairy: 3 per cent of dairy tariffs eliminated, plus new quotas for butter, skim milk powder and high‑protein whey.

Rules of Origin

The A‑EU FTA introduces straightforward Rules of Origin that propose to make compliance easier, allowing importers to claim preferential tariffs using a self‑certified statement of origin prepared by the exporter or producer. Exporters will no longer need certificates issued by authorised bodies, reducing administrative costs. Details on the agreement’s consignment rules which determine how goods may transit through other countries without losing their preferential status has not yet been released.

Non-tariff barriers

The agreement does not provide any exemptions from the EU’s Carbon Border Adjustment Mechanism (CBAM) or Deforestation Regulations. The EU remains a highly regulated market, and ongoing requirements including strict regulatory standards, sustainability obligations and quotas in sensitive agricultural sectors will continue to influence how Australian exporters access and operate in the EU.

Geographical indicators

A geographical indication (GI) identifies products whose qualities or reputation are linked to their place of origin. Under the FTA, Australia will protect 396 EU GIs, though most are not used locally and terms like ‘brie’ and ‘prosciutto’ remain unrestricted. Australia also secured a range of flexibilities, including:

  • Free use of terms such as ‘parmesan’
  • Grandfathering (no change) for producers of ‘feta’ and ‘gruyere’ with at least five years of continuous use in good faith
  • Phaseouts for terms such as ‘ouzo’ (five years) and ‘prosecco’ (ten years).

While Australia will protect prosecco as an EU GI, Australian winemakers retain the right to use ‘prosecco’ as a grape variety name domestically under the Wine Agreement. Australia will also establish a new GI system that enables the protection of both EU and future Australian GIs.

How can Australian businesses prepare?

The A-EU FTA provides significant new opportunities, but early planning is the key to unlocking them:

  1. Identify eligible products early - not all goods benefit
  2. Map your exposure - tariffs may fall, but non-tariff barriers and trade remedies may still apply
  3. Get the basics right - origin, classification and valuation. If you don’t meet the rules, you don’t get the benefit
  4. Maintain records - to substantiate origin and preference claims and stay audit-ready.

How BDO can help

Australian companies should act now to get expert advice on maximising the upcoming opportunities available under the A-EU FTA. BDO’s international trade and customs experts can assist by providing strategic guidance to help businesses adjust and stay competitive in a rapidly evolving global trade environment. 

Contact us today to learn more about how we can support your business.

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Key takeaways

The Australia‑EU FTA significantly expands duty‑free market access
  • Once in force, the Australia‑EU Free Trade Agreement will lift Australia’s FTA coverage to 88 per cent of total trade, with 98 per cent of goods exports to the EU entering duty‑free. The agreement also removes tariffs on a wide range of agricultural, manufactured and environmental goods, improving export competitiveness.
Key gains are balanced by ongoing regulatory and non‑tariff obligations
  • While the FTA delivers increased quotas for beef, sheep meat, horticulture and dairy, it does not provide exemptions from EU regulatory measures such as CBAM or deforestation rules. Australian exporters will continue to face strict regulatory standards, quotas and sustainability requirements when operating in the EU market.
Rules of Origin and GI changes require proactive business preparation
  • Simplified Rules of Origin allow self‑certification by exporters, reducing administrative costs, but compliance with origin, classification and record‑keeping requirements remains critical. The agreement also introduces new geographical indication protections and phase‑outs, requiring affected producers to understand transitional arrangements and future restrictions.

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Authors

Leonie Ferretter
Leonie Ferretter
Leader, Customs, International Trade and Excise
Partner, Customs, International Trade and Excise
Sneha smiling at the camera

Sneha Kunnath

Senior Consultant, Indirect Tax
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