Beef and car duties on the line, as von der Leyen hopes for Australia trade pact
· EUobserverUrsula von der Leyen and Australian prime minister Anthony Albanese are expected to shake hands on a trade deal following a meeting in Canberra on Tuesday
Beef and car duties on the line, as von der Leyen hopes for Australia trade pact
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By Benjamin Fox,
London
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EU officials are confident of sealing a trade pact with Australia early next week as the bloc continues its dash for bilateral trade deals.
President von der Leyen is due in Canberra on Monday for a three day visit that EU officials hope will conclude an agreement during a meeting with president Anthony Albanese on Tuesday (24 March).
Quotas of beef and lamb, and the tax treatment of Europe’s Mercedes, Porsches and BMWs, are among the outstanding items on the agenda.
Recent drafts of the agreement suggest that some 30,000 tonnes of Australian beef will be permitted in the EU market every year. However, the agricultural side of the agreement is not thought by EU officials to be as politically problematic as the pact with the South American Mercosur bloc. Ireland, one of the nay-sayers to Mercosur, has indicated that it supports an agreement with Australia, while France, another opponent, is more sanguine, pointing to higher phytosanitary standards used by Australia farmers.
That said, EU farming lobby outfit Copa Cogeca president Massimiliano Giansanti warned this week that “while recognising the strategic and economic importance of strengthening ties with Australia, it is essential that any agreement reflects a genuinely balanced partnership.”
In return, the EU expects Australia to scrap or phase out a 33 percent Luxury Car Tax on vehicles priced above €70,000.
Total goods trade between the EU and Australia was €47.2bn in 2025, with the EU having a surplus of €26.5bn. While Australia stands to be the main beneficiary from an agreement, the EU expects to gain access to Australia’s critical minerals and rare earths as it seeks to reduce its reliance on China.
Australia ranks third globally for rare earths and high among leading producers of critical minerals such as cobalt, manganese, zircon, tantalum, vanadium and uranium.
Both sides are also facing up to oversupply of Chinese goods. The agreement is also set to include a defence and security deal that could lead to more joint naval missions. The defence chapter could also partially heal the diplomatic wounds left by Australia’s decision in 2021 to partner with the UK and the US on a nuclear submarine agreement, rather than France.
The deal will be the latest in a string of trade pacts the EU has completed, following recent deals with India, the United States and the Mercosur bloc. Talks with the likes of the United Arab Emirates, the Gulf Cooperation Council, Malaysia and South Africa are among the others currently in the works.
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Ursula von der Leyen and Australian prime minister Anthony Albanese are expected to shake hands on a trade deal following a meeting in Canberra on Tuesday
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Author Bio
Benjamin Fox is our trade and geopolitics editor. His reporting has also been published in the Guardian, the East African, Euractiv, Private Eye and Africa Confidential, among others. He is based in Nairobi, Kenya, although he often reports from London.