Australia and the European Union have signed a trade agreement that eliminates tariffs on almost all exports of Australian critical minerals. According to Al Jazeera, this alliance aims to reduce dependence on China’s dominant position in the supply of rare earth elements.
According to the President of the European Commission, Ursula von der Leyen, the agreement, which took eight years to finalize, means that the EU and Australia are “moving even closer together.”
“We cannot be over-dependent on any supplier for such crucial ingredients, and that is precisely why we need each other,” von der Leyen told the Australian parliament.
“For both Europe and Australia, getting China right is a strategic imperative, and this is why bringing to life our critical minerals partnership will be crucial to our success.”
China holds a dominant position in global supply chains for critical minerals, controlling approximately 90% of the processing of rare earth elements, essential for the production of technological equipment such as electric cars, lithium-ion batteries, LED televisions, and camera lenses.
Australian Prime Minister Anthony Albanese explained that the removal of almost all import tariffs on critical Australian minerals into the EU will help stabilize global supply chains.
The agreement includes the elimination of over 99% of tariffs on EU exports of goods to Australia, which translates to €1 billion ($1.2 billion) annually in taxes for companies. Forecasts indicate that EU exports to Australia will grow by up to 33% over the next decade.
According to Albanese, the agreement will represent a value of approximately A$10 billion ($7 billion) annually for the Australian economy.
According to recent figures, EU companies exported €37 billion ($43 billion) worth of goods to Australia in 2025 and €28 billion ($33 billion) worth of services in 2023.
Official data shows that the EU bloc was Australia’s third-largest bilateral trading partner in 2024, as well as its sixth-largest export destination, and its second-largest source of foreign investment in Australia in 2024.
