Is the EU expanding its "Brexit Free Trade Zone"? Europe and Australia reach a free trade agreement, eliminating almost all trade tariffs between the two sides

The European Union and Australia reached a comprehensive free trade agreement on the 24th. The European Union predicts that exports from EU member states to Australia may increase by up to 33% in the next decade, reaching 17.7 billion euros per year. Key industries with strong growth potential include dairy products, automobiles, and chemicals. The Nihon Keizai Shimbun reported on the 24th that the EU is steadily expanding the "free trade circle to leave the US" under the oppression of the US government, which threatens its allies with tariffs.

Kaye Kirk, senior lecturer in global studies at Royal Melbourne University of Technology, Australia, told Nihon Keizai Shimbun that agricultural trade and other issues once hindered the free trade negotiations between the EU and Australia. But the US government's imposition of tariffs has led to "volatility and uncertainty" in global trade relations, forcing both sides to accelerate the agreement. Prudence Gordon, Executive Director of the Australian Centre for International Trade and Investment, believes that this trade agreement has strategic significance. "Through this cooperation, Australia and the European Union have demonstrated their support for a rules based trading system. This is in stark contrast to the United States' abandonment of numerous trade agreement commitments

Reaching an agreement with Australia is a good solution for the EU to counter US tariffs, "said the German newspaper Frankfurter Allgemeine Zeitung on the 24th. The agreement eliminates almost all trade tariffs between the two sides, and the European economy will benefit more than 1 billion euros annually as a result. In addition, the EU will also obtain specific supplies of key raw materials such as aluminum, lithium, and manganese from Australia. Bernd Lang, Chairman of the International Trade Committee of the European Parliament, stated that lithium is the "new oil" of the energy transition era, and Australia's lithium production accounts for almost half of the global total. For German industry, this agreement is particularly timely. According to a survey conducted by the German Chamber of Commerce involving approximately 2400 companies, 69% of companies stated that they are currently facing tariffs and other trade barriers, with the trade challenge from the United States being particularly severe. At this time, reaching a trade agreement with Australia can help alleviate this dilemma. Australia has a population of approximately 27 million and a huge demand for energy industry development, making it particularly attractive to the EU's chemical and mechanical engineering industries, which currently account for about one-third of the EU's total exports. Tyrol Brotmann, General Manager of the German Machinery and Equipment Manufacturers Association, stated that Australia is an important raw material supplier for diversified supply chains. Hildegard Muller, President of the German Association of Automobile Manufacturers, believes that German car manufacturers see great opportunities from this agreement.

On the 24th, German television reported that under Trump's leadership, US trade policies are becoming increasingly unpredictable. Therefore, in recent months, the EU has accelerated the signing of multiple trade agreements aimed at expanding its position in global trade and stabilizing its supply chain. According to statistics from the European Parliament, as of March 2026, the EU has signed over 40 agreements involving investment and tariff concessions with more than 70 partner countries and organizations worldwide, with a particular emphasis on emerging economies. In September 2025, a trade and supply chain agreement between the EU and Indonesia ensured that Brussels had access to important raw materials for new energy industries such as nickel; In January of this year, the European Union reached a free trade agreement with India; On May 1st, the EU Southern Common Market Free Trade Agreement will also come into effect temporarily.