Australia and the EU have entered into a trade agreement to lessen their reliance on China for critical minerals.
The deal, finalised after eight years of negotiations, will eliminate tariffs on nearly all European goods and most exports of Australian critical minerals, reported Reuters.
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The agreement comes in response to heightened US tariffs under President Donald Trump’s administration and increased concern over China’s dominant role in the supply of critical minerals and rare earths.
European Commission President Ursula von der Leyen said: “For both Europe and Australia, getting China right is a strategic imperative. This is why bringing life to our critical minerals partnership will be crucial to our success.
“We cannot be overdependent on any supplier for such crucial ingredients – and that is precisely why we need each other. Our security is your security, and with our new security partnership, we have each other’s backs.”
The removal of more than 99% of tariffs on EU goods exported to Australia is expected to reduce duties by €1bn ($1.2bn) annually, with EU exports to the country projected to increase by up to 33% over the next ten years.
At a news conference, Australian Prime Minister Anthony Albanese said that the agreement would generate approximately A$10bn ($7bn) each year for the country’s economy.
He added that eliminating nearly all import tariffs on Australian critical minerals into the EU would contribute to stabilising global supply chains.
This trade deal also indicates Europe’s increased involvement in the Indo-Pacific region following recent trade agreements with Indonesia and India.
