What to know about the long-awaited EU-Australia trade agreement

Australia and the European Union signed a free trade agreement on Tuesday after eight years of negotiations, removing tariffs on almost all goods and potentially easing EU access to Australian critical minerals.

However, some Australian agricultural exports, including beef and lamb, will face quotas. Australian farmers criticised the pact for offering what they called "subpar" access to the bloc, ​while French farmers ‌argued the quotas were too generous.

"The cumulative impact of successive trade agreements makes these concessions unacceptable," pan-European agriculture lobby group Copa-Cogeca said in a statement. 

The deal follows intensified talks amid sharply higher US tariffs under the Trump administration and growing ⁠Western concerns over China's dominant position in rare earths and other critical minerals. The two sides also signed an agreement to deepen security and defence cooperation.

Here are the highlights:

Overall benefits

Both sides will eliminate tariffs on almost 100% of EU exports of goods, with the exception of certain steel products and some EU farm produce. The European Commission says EU exports to Australia will be spared 1 billion euros ($1.2 billion) of Australian duties, and ​the value of those ‌exports should rise by a third over 10 years. Australia says the agreement will be worth about A$10 billion ($7 ⁠billion) annually to its economy.

Agriculture 

Tariffs will fall to zero from day one for key EU export products such as wine and sparkling wine, some fruit and vegetables, including preparations and fruit juices, chocolate, sugar, ‌confectionery and ice cream and many processed agricultural products.

Tariffs on EU cheese will drop to zero over three years.

The ⁠EU will also remove tariffs on most Australian agricultural products including wine, nuts, fruit and vegetables, honey, olive oil, most dairy products, wheat, barley and seafood.

Australian beef, lamb, sugar, rice, wheat gluten, skimmed milk powder and butter will get either new or expanded ​tariff rate quota volumes. For beef, a flashpoint for farmer demonstrations over the EU's deal with South American bloc Mercosur, ‌the annual quota will rise over 10 years to 30,600 metric tons. The EU says this represents around 0.5% of EU domestic consumption and less than 2% of all Australian beef exports.

Both sides can trigger safeguard measures to counter import surges.

Protected European product names 

Australia will fully protect 165 EU 'geographical indications' (GIs) for agrifood products such ‌as Comte cheese and 231 spirits GIs such as Irish whiskey. In some cases, including for Ouzo or Pecorino Romano, there is a relatively short phasing-out period.

For some other products, such as feta or gruyere, ​prior Australian users having used the term in a continuous manner for at least five years can retain the right to use the terms assuming the origin of the product is clearly labelled.

Producers who make and sell Prosecco wine in Australia will be allowed to continue doing so ​domestically. Exports will be stopped after 10 years.

Automobiles

Australia will fully liberalise market access for all EU passenger cars and other vehicles, with the exception ​of a few tariff lines on trucks, for which duties will be gradually removed over a short ​period.

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Australia will also increase the 33% luxury car tax threshold for electric vehicles to A$120,000, which should principally benefit EU producers. About 75% of EVs from the EU will then be exempted from paying the luxury ​car tax.

Critical minerals 

The EU will eliminate already low duties on imports of Australian critical minerals and hydrogen. The two sides have agreed to ban export restrictions.

The agreement is also designed to create a level playing field in terms of access to Australia's resources, such as aluminium, lithium and manganese, and open up investment opportunities to Europeans.

Services

The deal will make it easier for EU firms to sell services in Australia, including professional and business services, maritime transport, and financial ⁠services. The agreement will reduce and eliminate discrimination and expand opportunities for EU and Australian service providers and investors.

Investments

EU investors will receive the most favourable treatment accorded to any foreign ⁠investor in Australia, and in ​most cases be treated in the same way as Australian investors. Both EU and Australian investors will be able to establish their companies and operate them freely, in each other's territories.

(FRANCE 24 with Reuters)