Canberra and Brussels finalized negotiations on a comprehensive free trade agreement on March 24, 2026, creating a trade zone encompassing over 450 million consumers.
The agreement, which officials say will eliminate tariffs on over 99% of EU goods exported to Australia, is expected to increase EU exports to Australia by as much as 33% over the next decade, reaching a value of up to €17.7 billion annually.
According to estimates, the reduction in tariffs will save EU exporters approximately €1 billion per year in duties. The deal comes as the EU seeks to diversify its trade relationships and secure access to critical raw materials.
Key EU export sectors set to benefit from the EU-Australia agreement include dairy products, with a projected export increase of 48%, as well as vehicles and chemicals. Tariffs will be removed on current top EU exports to Australia, such as cheese, meat products, wine, sparkling wine, select fruits and vegetables, chocolate, and confectionery. The agreement could provide a boost to Latvian goods exports to Australia.
The agreement also addresses concerns for EU agricultural producers. Sensitive agricultural sectors like beef, sheep and goat meat, sugar, certain dairy products, and rice will only allow for limited imports from Australia through carefully calibrated tariff rate quotas.
In the services sector, Australia will open its market to financial and telecommunications services. Support will also be provided to small and medium-sized enterprises (SMEs) in both the EU and Australia to increase their exports.
Following recent agreements with Indonesia and India, this free trade agreement further diversifies the EU’s trade network in the strategically important Indo-Pacific region.
Latvia’s exports to Australia have been growing in recent years, making the country an increasingly important trading partner for Latvia.
In 2025, Latvian exports totaled €55.24 million, an increase of €8 million compared to 2024, according to data from the Central Statistical Bureau. Key Latvian exports to Australia include wood and wood products, furniture, machinery, electrical equipment, pharmaceuticals, and meat.
The next steps involve legal review of the agreement’s text and translation into all EU languages. The European Commission will then submit a proposal to the Council for the signing and conclusion of the agreement.
Negotiations for the free trade agreement with Australia began in July 2018. The 15th and final round of official negotiations took place in April 2023, followed by intersession discussions at technical and political levels.
Detailed information is available on the European Commission’s website.
